20 October 2021: After another solid week of gains, Bitcoin have finally reached a new all time high. After hitting an ATH just shy of $65,000 USD nearly 6 months ago, Bitcoin has blasted off to $66,000 and counting. This article will analyze Bitcoin and show some charts of the recent stock market recovery.
Asset Rally Continues Into October
What appeared to be the asset party coming to an end turned into a massive reversal for both cryptocurrencies and stocks. While the current monetary policy of governments and central banks continues to back the economy into a corner, at the moment it appears as if assets may continue to rise. Additionally, while it originally looked like Bitcoin and stocks may have broken their correlation, with the reversal confirmed on the US500 index and tech stocks, that may have been a premature observation.
Key takeaways this week are as follows:
- Bitcoin breaks through and hits a new all time high as the new BTC ETF hits Wall Street
- The cryptocurrency market as a whole is rallying behind Bitcoin
- Stocks have bottomed temporarily and sprung into a fresh rally
Bitcoin to New Heights
At the time this article was written, Bitcoin has officially minted a new all time high above $66,000 USD per coin. Fresh off the hype of a newly added ETF for Bitcoin on Wall Street, those who purchased Bitcoin at the correctional low of under $30,000 are now enjoying 120% + gains. With Bitcoin now rallying hard, it is actually pulling the entire cryptocurrency market up with it.
Over the past 7 days:
- Bitcoin is up 18%
- Ethereum is up 13%
- Litecoin is up 15%
- Polkadot is up 20%
The recovery on Bitcoin has created further investment into all cryptocurrency projects, something worth noting here.
Here is a look at the Bitcoin chart:
Based on the price channels of the previous all time high, Bitcoin still has plenty of room to increase in price of the medium term this cycle. To hit the top of the price channel as it did earlier this year, Bitcoin may rally to as high as $80,000 USD. Nevertheless, this recovery on BItcoin has been impressive. Of course, a pullback is inevitable at these prices based on the steepness of this rally.
Here is a closer look at the recent price action:
Here on the 4hr chart, the recent rally is more visible. Something to pay attention to here is the pace in which Bitcoin rises above the 50 day moving average shown in blue. At this point, we reccommend holding whatever Bitcoin you have added to your portfolio for the remainder of the bull run. Utilize pullbacks as opportunities to potentially add more to your bags if you feel comfortable.
Fresh Rally in American Stocks
The US500 index has been on a tremendous, central bank-fueled rally since the February 2020 Covid crash. The index has been following the same uptrend price channel since October of last year nearly to the day. It appeared as if the US500 was finally breaking down out of that uptrend and then made a signficant reversal.
Take a look at the YTD chart here:
Even with every indicator pointing to a decline in asset prices, so long as the Federal Reserve's monetary policy continues and rates stay near zero, assets have absolutely no reason to decline. The US500 index has demonstrated beautifully here with another rally.
Despite economic sentiment, inflation is still increasing and assets are still rising. It is impossible to gauge when the party will end. Bitcoin appears to be very strong right now and should absolutely be held as long as possible. When dealing in probabilities, it lessens the circumstance of making emotional trades. Last week, while stocks teetered we reccommended reducing your exposure to risk whilst continuing to monitor ongoing trends.
This week is no different. Continue to be smart even with assets rising. The further the market moves toward bullish sentiment the greater the probability of a correction or bubble pop. As always, conduct your own due diligence, continue to monitor your portfolios, and have a great rest of the week!
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