Cryptocurrency market analyst Josh Rager says that formidable resistance could be forming in front of Bitcoin`s rising movement. If we look back at the Bitcoin price history, there have been many significant corrections, with BTC sometimes dropping as much as 30%. These kinds of pullbacks have usually been seen after huge bull-runs.
The long-term prospect of Bitcoin is bullish, but a bearish scenario could materialize in the meantime. The cryptocurrency market has experienced a significant upward movement in 2020, and Bitcoin reached around $14,000 this year. It is currently trading at its highest prices since January 2018.
Many analysts believe in Bitcoin`s capability to protect against inflation, and they think this capability is the main reason for its bull-run in 2020. Unlike fiat currencies, BTC has a limited supply, and no one can control and print it. Bitcoin is increasingly being perceived as a store of value with the ability to preserve purchasing power. Therefore, many people see Bitcoin as a safe haven, similarly to gold.
The COVID-19 pandemic has had severe consequences on global finance, and central banks have to follow quantitative easing policies and print a lot of money. This money printing process can lead to the erosion the purchasing power of fiat currencies. In response, many people are shifting their cash to other assets such as Bitcoin or stocks.
Dips are impending
In Josh Rager’s view, corrections are natural for healthy bull-runs. They are normal reactions to rallies, and these dips will attract many new investors to the market. The pullbacks can be a great opportunity for investors to obtain an asset like BTC at a more favorable rate.
Most of the investments will come from traditional markets. The recent Bitcoin bull-run has attracted many traditional firms, who now have cryptocurrency on their radar. Bitcoin`s futures markets have also grown significantly in 2020, indicating that institutional interest in Bitcoin and cryptocurrency is increasing.
PayPal`s recent decision to add cryptocurrencies in the list of its offerings was also a great bullish signal for the cryptocurrency market.
More money printing and more bullish prospects for Bitcoin
If the US government releases the second stimulus package, Bitcoin`s bullish movement could become even faster. This quantitative easing policy will accelerate BTC adoption, and it is because of the advantages of Bitcoin compared to fiat currencies.
The stimulus package could deteriorate the status of the US dollar and decrease its purchasing power. It means more positive points for the king of cryptocurrencies, and indeed, we can say that Bitcoin`s adoption is imminent.
Andrew is a writer that does most of his work on cryptocurrency-related topics. While he’s primarily interested in Bitcoin, he also follows major altcoins and the innovative ideas that new cryptocurrency and blockchain projects are bringing to the table.