Bitcoin prices raced towards $ 35,000 when European investors woke up to Elon Musk’s latest cryptocurrency approval.
The BTC / USD exchange rate rose as much as 4.8 percent during the Asian and early European session, reaching an intraday high of $ 34,728. That followed a jump of 2.63 percent last week, which closed January with a monthly gain of 14.13 percent.
Bitcoin attempts to break above its short-term trendline resistance. Source: BTCUSD on TradingView.com
Musk has Bitcoin
The shock of recent interest in retail came after Tesla and SpaceX founder Elon Musk – a high-profile tech celebrity in his own way – re-launched himself as a Bitcoin supporter. In an audio conference with venture capitalist Andreessen Horowitz and other investors, Mr. Musk called the cryptocurrency “a good thing,” stating that it is on the verge of “widespread adoption through conventional funding.”
Mr. Musk’s comments followed his cryptic Twitter bio update on Friday in which he adapted his introduction to just one word: Bitcoin.
That helped propel the cryptocurrency to its weekly high above $ 38,500 as many analysts noted that Mr. Musk would convert his companies’ cash reserves into Bitcoin. Nevertheless, it lowers those gains all the way to the weekend, to resume the upward movement Monday after Mr Musk’s latest statement.
“The richest man in the world is a big fan! He must have a bag, ”said Lark Davis, a crypto YouTuber, Monday. “Elon Musk will likely announce his bitcoin buy soon. The man must now be worth several hundred million!“
A super-easy Federal Reserve, close to zero interest rates, unlimited bond buying and stimulus injections worth more than $ 3 trillion have prompted investors to pour their capital into the Bitcoin market in the past eleven months. Most of them, including the MicroStrategy and Square companies, see the cryptocurrency as a hedge against inflation.
US dollar index's gains stand limited by concrete resistance areas. Source: DXY on TradingView.com
Tesla has $ 19 billion in cash reserves that will likely lose their dollar value if the Fed’s lenient program continues. That has raised the prospect that Mr. Musk could convert some, if not all, of his cash balances into Bitcoin.
Always high ahead?
The latest upward move has improved Bitcoin’s outlook to include one more bull run to retest its all-time high of nearly USD 42,000. For starters, the cryptocurrency is trying to visibly break out of a Rising Wedge pattern. The primary upside target is close to $ 50,000.
Additionally, Marc Principato, the executive director of Green Bridge Investing, sees a so-called Wave 5 brewing on the Bitcoin charts, with the expectation that maintaining support above the USD 27,500 – USD 30,000 area will see the price rise above USD in the coming sessions. 40,000.
“Based on our specific rules, as long as the price fluctuates above 27.5K, our outlook will remain optimistic even within this smaller range-bound structure,” the analyst wrote. “27.5K to 30K is a wider upper low area, and in the context of aHigher lows often lead to higher highs. “
Bitcoin bullish setup highlighted by Marc Principato. Source: BTCUSD on TradingView.com
Dmytro Volkov, CTO of the international cryptocurrency exchange CEX.IO, matched the bullish sentiment by providing the details of their latest sign-up statistics. He noted that the number of new users on their exchange increased after Mr. Musk’s pro Bitcoin update.
“Last Friday we saw an abnormally high number of new registrations on CEX.IO. We saw a similar increase in early January, but then there were half as many registrations, ”he told NewsBTC via email.
“At the moment the number of new user registrations is about 4 times higher than normal. Other exchanges are seeing a similarly surge in the number of users, ”he added.