A flash pump in the early London hours Thursday led the Bitcoin price above $16,000.
As of 1000 GMT, the BTC/USD exchange rate topped for the day at $16,169, a level last occupied in January 2018 when the pair was correcting lower after establishing its record high near $12,000 the previous month. The sudden upside move pushed Bitcoin’s year-to-date gains to circa 126 percent.
Nevertheless, BTC/USD failed to hold $16,000 as support. A higher selling pressure above the level prompted the pair to correct lower immediately. It fell to as low as $15,623 almost an hour after establishing its new year-to-date high, leading traders to say that the pump may have been a fake breakout all this time.
Michaël van de Poppe, an Amsterdam-based market analyst, said that it was “not a convincing move to the upside,” stating that Bitcoin could be forming a local top with its continuous bearish rejections at $16,000.
Could be a top construction here on the markets.
Not sure, but still not a convincing move to the upside on $BTC.
— Crypto Michaël (@CryptoMichNL) November 12, 2020
Meanwhile, other analysts expected Bitcoin to bounce back as long as it trades above certain technical support levels.
Independent chartist Edward Morra noted that the cryptocurrency lacked volume this time to turn its close above $16,000 into a full-fledged breakout move. He added that BTC/USD would refuel itself at a medium-term ascending trendline — holding as support — before attempting to break bullish above $16,000 again.
"As long as this [Bitcoin] trendline is up, bulls ain't done," said Edward Morra. Source: XBTUSD on TradingView.com
Many analysts agree that Bitcoin would achieve a record high either in the running of the next quarter. It would happen against the backdrop of ultra-low interest rates and unprecedented monetary and fiscal stimulus across the globe. Bitcoin proposes to serve as a hedge against such an inflationary outlook.
Billionaire investors, including Paul Tudor Jones and Stan Druckenmiller, have purchased the cryptocurrency as insurance against potential economic turmoil.