Bitcoin (BTC) price passed the $ 13,000 mark on October 21 to hit $ 13,217 after traders hit key resistance levels at $ 11,900, $ 12,000, and $ 12,500 for the past 48 hours. While the sudden upturn was due to a variety of technical reasons, there are three key factors that are driving the rally.
The three catalysts are a favorable technical structure, PayPal for cryptocurrency purchases and the increasing dominance rate of Bitcoin.
PayPal’s crypto announcement adds to the dynamism of BTC
PayPal officially announced today that users can buy and sell cryptocurrencies, including Bitcoin.
Over the past year, speculation about PayPal’s potential cryptocurrency integration has steadily increased after various reports claimed the company was working on it.
In an official statement, Dan Schulman, President and CEO of PayPal, confirmed the integration of the cryptocurrency. He wrote:
“We are committed to working with central banks and regulators around the world to offer our support and make a meaningful contribution to shaping the role digital currencies will play in the future of global finance and commerce.”
According to PayPal, the price of Bitcoin rose instantly from around $ 12,300 to $ 12,900.
Sui Chung, CEO of CF Benchmarks, a subsidiary of Kraken Exchange, told Cointelegraph that bullish sentiment is likely to return to the crypto market. According to Chung:
“Bitcoin topping $ 13,000 today, a 16-month high, shows that this trend is only picking up steam. That PayPal, a household name, received a conditional BitLicense is likely to fuel an optimistic mood. Today is an important signpost for a further price increase in the future. From then on, mainstream media and “Mom and Pop” retail investors could soon show interest in the asset, as they did in late 2017. “
Bitcoin dominance is increasing
Over the past week, Bitcoin has outperformed alternative cryptocurrencies, DeFi tokens (decentralized finance) and Ethereum.
Josh Olszewicz, a cryptocurrency technical analyst, said BTC’s dominance is above a major moving average. Technically, this suggests that Bitcoin may continue to outperform altcoins in the near future. Olszewicz said:
“For the first time since May, BTC dominance is back above the 200-day moving average. King Corn is back.”
BTC shows a bullish high timeframe structure
Throughout October, traders pinpointed Bitcoin’s favorable technical structure to the higher timeframe.
Bitcoin’s weekly chart, in particular, has shown a breakout, surpassing the top local mark reached in August.
Two months ago, BTC was trading at $ 12,468 on Binance and continued to drop below $ 10,000. As mentioned earlier, today’s high volume spike has pushed the price to a new 2020 high of $ 13,217, well above the previous local spike.
In the short term, traders expect the market to cool off after such a strong rally. Flood, a pseudonymous crypto futures trader, said:
“I think we’re pretty overwhelmed at BTC right now. I would imagine seeing some kind of backtracking where we’re trying to find support in the 12.2-12,000 range. That doesn’t mean that we can’t keep running, but that we are a bit secure here. “