Bitcoin broke briefly above a key resistance level at $56,000 on Friday, while ether’s slowly catching up to bitcoin’s gains.
- Bitcoin (BTC) trading around $55,512.76 as of 22:00 UTC (5 p.m. ET). Gaining 6.60% over the previous 24 hours.
- Bitcoin’s 24-hour range: $50,821.47-$56,283.55 (CoinDesk 20)
- BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.
Some are attributing the astonishing rise of bitcoin’s price, including a short time above $56,000, to the tremendous demand from buyers looking to hedge against inflation.
“Through the insatiable buy-side pressure from exchange-traded fund (ETF) issuers, closed-end funds and large public corporations adding bitcoin to their positions, demand is massively outstripping supply,” said John Willock, chief executive at digital asset exchange Blocktane. “I feel confident that we won’t see a massive crash like post-2017.”
The first publicly traded bitcoin ETF in North America, managed by Canada-based Purpose Investments, saw an impressive $165 million worth trading volume on its first day of trading, well above a typical Day One for a Canadian ETF. (TradeBlock, a CoinDesk subsidiary, is the index provider of Purpose Investments’ bitcoin ETF.)
Read More: North America’s First Bitcoin ETF Hits $165M Trade Volume in First Day
Yet, there are still several psychological barriers for bitcoin to break, even as it passed a key milestone of $1 trillion in market capitalization.
While the 10-figure market cap potentially makes bitcoin go from “a magic internet money meme” into a largely recognized investment asset, it also poses some psychological challenges to some buyers, who may sell some bitcoin for profit taking.
Read More: Bitcoin’s Price Surge Accelerates After Passing Milestone of $1T Market Value
In the derivatives market, bitcoin’s price could be tested at around $56,000, according to Andrew Tu, an executive at quantitative trading firm Efficient Frontier.
“Based on options open interest, it looks like $56,000 is the next big resistance,” Tu said.
Some are taking it a step further. Michael Burry, “The Big Short” investor and founder of the Scion Asset Management, said in a now deleted tweet, “In an inflationary crisis, governments will move to squash competitors in the currency arena,” adding “$BTC #gold” to the end of the tweet.
However, while many bought into bitcoin’s “digital gold” narrative at the beginning of the coronavirus pandemic, physical gold has lost value year to date while bitcoin has skyrocketed.
Ether near $2K, DeFi drives Binance’s BNB
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Friday,…
Read more:Market Wrap: Bitcoin Briefly Above $56K, Ether Follows BTC’s Rally – CoinDesk
