Earlier today, Bitcoin rose to its highest level since late February and regained its $1 trillion market cap.
Recently, Bitcoin was unable to break key resistance at $50,000, as it failed to find support over its 50-, 100-, and 200-day SMA points on the 4-hour time frame. With continued institutional buying, however, Bitcoin was able to reclaim $53,600. While current price levels are still off all-time highs, it has mostly recovered losses from late February.
Institutional Demand Continues
Current sentiment appears to be very bullish, as more institutional players rush to add Bitcoin to their balance sheets and portfolios. Last week, Goldman Sachs announced that they were restarting their crypto trading desk due to increased demand from institutional clients. MicroStrategy recently added more Bitcoin to its balance sheet, spending an additional $10 million to buy 205 Bitcoins in a high-conviction crypto bet.
Stimulus Package Gives Life to Rally
Over the weekend, the Senate also passed President Biden’s $1.9 trillion stimulus package. It’s likely that the approval played a significant factor in Bitcoin surging past $50,000.
Since the pandemic, the Federal Reserve injected more than $9 trillion dollars in emergency repo operations.
Coupled with the $2.2 trillion pandemic response package and President Biden’s $1.9 trillion stimulus package, the U.S. has printed much more than 20% of its currency in circulation in the past year alone. The decline in USD’s value makes a stronger investment case for Bitcoin, as the “digital gold” is a hedge against inflation.
Analysts have remained bullish on Bitcoin, with some forecasting price targets of $75,000. Some have noted that the speculation and the momentum have cooled off, but the influx of big institutions will likely lead the cryptocurrency to new highs.
Featured image from UnSplash
