Surging bitcoin nears its highest level in almost 3 years, and is set to test a key technical level that could spur a move toward $20,000
Reuters
- Bitcoin surged more than 3% on Tuesday as it approached a key resistance level at $14,000.
- Recent positive developments for the digital cryptocurrency include PayPal allowing its account holders to buy, sell, and transfer bitcoin, as well as Square's bitcoin purchase worth $50 million.
- If bitcoin is able to decisively trade above the $14,000 level, the next level of resistance traders will watch is its all-time high near $20,000.
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Bitcoin surged more than 3% on Tuesday to $13,480, putting the digital currency within striking distance of its June 2019 high of $13,880.
If bitcoin does surpass $13,880, it would reach its highest level in almost three years.
The cryptocurrency has benefited from a stream of positive headlines over the past week. Square said it furthered its investment in bitcoin by purchasing $50 million worth of the digital coin in a single day without disrupting the market.
Shortly after Square's announcement, PayPal said it would enable its account holders the ability to buy, sell, and transfer bitcoin, lending credibility to the crypto asset.
Institutional investors are starting to take notice. JPMorgan said last week that bitcoin looks attractive as it competes with gold as an "alternative" currency. The firm noted that millennial investors favor bitcoin over physical gold.
JPMorgan said it believes bitcoin could double or triple from current levels and would have to surge 10x to match the value of all the physical gold in the world.
"Even a modest crowding out of gold as an 'alternative' currency over the longer term would imply doubling or tripling of the bitcoin price," JPMorgan said.
With bitcoin on the rise, the technicals are coming into focus as it pushes up against the last major resistance level before its all-time high around $20,000.
That level is $14,000, just 4% above bitcoin's current price as of Tuesday afternoon.
"Bitcoin has seen short term momentum improve within its long term uptrend and has a good amount of room to resistance, which is close to about $14,000," Fairlead Strategies founder Katie Stockton said in a note last week.
If bitcoin is able to decisively trade above its $14,000 resistance level, all eyes will be on its next, and last, remaining resistance level: $20,000. A break above that level would set the cryptocurrency up for new all-time highs.
Year-to-date, bitcoin is up 87%, yet is still 32% below its 2017 high of $19,783, according to data from Coindesk.