Bitcoin is struggling to recover from its recent collapse
Last week was exciting for Bitcoin as it not only reached an all-time high but…
Bitcoin has experienced massive volatility over the past few days before and during the US presidential election, with volatility hovering between $13,000 and $14,000.
The standard cryptocurrency rose by about 1.5% during the past 24 hours, to trade today, Wednesday, above $13,800, which is the second-highest level recorded for this year, after rising yesterday, surpassing the level of $14,000 for a short period, the highest since January 2018.
This is the second time the currency has reached its peak above the $14,000 barrier in just one week. This may be partly explained by political factors represented in the US presidential election, but it is non-political factors including increased institutional interest and PayPal’s decision to provide crypto services that have played a big role in soaring prices.
Strong support within the $13,000 low is promising, as it indicates that the bulls are still in complete control of price action, and $13960 is the critical level that Bitcoin needs to close above it to extend its recent uptrend.
Yesterday morning, Bitcoin was suffering from an influx of selling pressure, which made it fall above its lowest levels yesterday at $13,200, but it reversed its trend to recover all its losses to reach its highest levels during this year at $14,000, supported by opinion polls for the presidential elections in the United States, where he comments crypto trading Investors have their hopes for a clear win for Joe Biden.
The Democratic candidate promised to launch a massive infrastructure spending program to confront the Coronavirus pandemic and its impact on the US economy, and investors expect at least $2 trillion in financial aid from the Democratic administration.
With the entry of more liquidity into the economy, the US dollar is expected to continue its decline. The decline in the dollar’s purchasing power may lead to an increase in “speculative assets” such as Bitcoin, as happened after the first stimulus aid of $2.2 trillion.
Many digital currency analysts expect the leading cryptocurrency to be the biggest winner in a controversial race, bitcoin was only present in the US presidential election twice and its price rose significantly with each successive race, in November 2012 its price was about $12 while in 2016 the price was Over $700 and now at the $14,000 level, that’s an increase of 1900% in four years and nearly 140,000% in eight years.
Despite the optimistic expectations in the markets, there are fears of a delay in the election results due to Trump’s criticism of the vote by mail that could be rigged, and this, in turn, may lead to an increase in tensions and create a state of uncertainty in the market, which may push investors towards the US dollar. What will negatively affect Bitcoin?
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
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