Update (12:12 UTC): Bitcoin fell by nearly $500 to $11,546 in the 10 minutes to 10:30 UTC, after failing to absorb selling pressure above the $12,000 mark during the early European trading hours. It’s the second rejection above $12,000 in eight days, and comes as the U.S. dollar shows signs of bottoming out.
Bitcoin is on the hunt for a new yearly high, having crossed above $12,000 early on Monday.
- The cryptocurrency picked up bids during the Asian trading hours, rising from $11,750 to $12,068, according to CoinDesk's Bitcoin Price Index.
- At press time, bitcoin is trading at $12,000 – just 1% short of the 2020 high of $12,118 reached on Aug. 2.
- A break above $12,118 looks likely, as bullish demand can be seen in the strong hourly volume that continues to rise with bitcoin's hike in value.
- If bitcoin manages to surpass the $12,118 level, the next target would be the high of $12,325 reached early in August 2019.
- Bitcoin ended last week (Sunday, UTC) at $11,683 – the highest weekly close since January 2018 (see chart above right).
- That has has opened the doors for further gains, according to some analysts.
- The options market is also skewed bullish, with call options (bullish bets) drawing higher prices than puts (bearish bets) on the one, three, and six-month time frames.
- Crypto investment firm Three Arrows Capital's co-founder Kyle Davies said Ethereum's decentralized finance (DeFi) ecosystem could be another catalyst bolstering bitcoin's recent rally.
- Davies said new projects in DeFi may be taking advantage of "existing primitives for loans and trading."
- Bitcoin, however, looks vulnerable to a potential bounce in the U.S. dollar, having recently developed a relatively strong negative correlation with the greenback.
- Bitcoin jumped from $9,100 to $12,118 in the 13 days to Aug. 2, as the dollar index, which tracks the value of USD against major currencies, fell from 96 to a 26-month low of 92.55.
- The dollar is now at its most oversold in over 40 years, according to Morgan Stanley.
- The investment bank said it had exited its bearish position in the U.S. dollar.