Bitcoin, whose price fell close to the $9,500 level last week, has dramatically switched its interim bias upside down.
The world’s leading cryptocurrency on Monday soared to a session high of $12,829.96, adding over 32 percent to its month-to-date low on San Francisco-based Coinbase exchange. The upside price action further brought bitcoin closer to its 2019 peak of $13,868.44, prompting speculators to envision a double top scenario.
Technically, a double top situation is alarming because of its tendency to fuel bearish reversals. Assets retesting local price tops within a small timeframe tends to fall back sharply. But according to market analyst Josh Rager, such is not the case with bitcoin.
The prominent trader said on Tuesday that a double top formation is not bearish if the asset’s prior moves are to the upside. A fall in prices was valid in 2018 when bitcoin was in a strong downtrend. But in 2019, the cryptocurrency is trending upwards – and in near-term – towards the $14,000 level.
It’s likely that fear of a “double top” may be shared by some if price pushes above $13k again
Double tops were a popular reversal pattern in 2018 where price created a double high or near high before the next drop
The big difference though…
2019 is a bull market pic.twitter.com/2ozUjAdCD4
— Josh Rager 📈 (@Josh_Rager) July 9, 2019
“A break and close above $12,354 on 4hr/1 Day resistance and I’d look for BTC to retest previous highs and will trade the ranges until that happens,” tweeted Rager.
Bitcoin Dominance High/Tether Prints
The weekly upside action took the bitcoin’s total percentage share in the cryptocurrency market to 66.82. The cryptocurrency’s dominance had started rising right after price low on July 2. At that time, bitcoin engulfed 64.55 percent of the overall market.
A more than 2 percent increase in dominance coincided with the printing of $100 million worth of Tether stablecoins, USDT. According to Jesse Powell of Kraken exchange, growth in the supply of USDT coins is bullish for bitcoin. The chief executive told TD Ameritrade that Tether supplied fresh stablecoins to meet demand, adding that the USDT demand itself testified that traders are looking to purchase bitcoin.
“Recently, we’ve had massive inflows of fiat currency, so I believe the Tether prints are a result of new fiat coming in,” said Powell.
The statements followed reports that claimed Tether is artificially inflating the price of bitcoin by printing unpegged USDT coins. Noted economist Nouriel Roubini mentioned it during his recent debate with Arthur Hayes, co-founder & CEO of BitMEX exchange, accusing Tether founder of manipulating the bitcoin market.
Indeed, more fiat Tether manipulation of Bitcoin https://t.co/8BSsmitsrD
— Nouriel Roubini (@Nouriel) July 1, 2019
Powell, nevertheless, believed that the demand for USDT is real, and the stablecoin alone cannot pump the bitcoin market by billions of dollars.
“It’s huge retail demand and all the media attention on it. It’s not Tether,” Powell added.
What’s Driving Investors to Bitcoin?
The amount of global media coverage bitcoin receives surged dramatically in recent months. There are mainstream financial companies like TD Ameritrade, Bakkt, and Fidelity Investments that are developing bitcoin trading solutions for both the retail and institutional investors. There is Facebook, whose plans to launch a payment platform Libra has put bitcoin in the headlines of many leading news services. And then, there are a series of macroeconomic and geopolitical factors that are sending investors looking for haven assets like gold and bitcoin.
The cause is simple: aggressive buyers crossed the bid-ask spread and overpowered both passive and aggressive sellers. Based on price action, there were aggressive buyers with deep pockets in action last night. There was no specific trigger known to anyone outside of them.
— Alex Krüger (@krugermacro) June 26, 2019
“More buyers than sellers” is a meme. I’d bet there were more sellers than buyers,” tweeted Krüger. “However, buyers were large & aggressive. What moves a market upwards is not “more buyers than sellers” but “aggressive buyers overpowering aggressive and passive sellers.”