(DAILY NOTION): BTC/USD Bulls Triumphantly Roars Past $29,000, Next Mover: Outcome of U.S. Pandemic Relief Cheques

Source: Yahoo Finance

The BTC/USD bulls seem to be making a statement: we are here to stay. The bulls broke past an ascending trend line from Nov 30 and surged past the $29,000 mark in what can only be described as an astounding feat. At the time of writing, the BTC/USD is comfortably sitting at $29,169.66 with a Relative Strength Index (RSI) of 68.

Analyst Joseph Young from Coin Telegraph makes an interesting analysis of the monthly RSI of Bitcoin. In his report, it is stated the monthly RSI is close to 80, signalling an overbought condition. In past times, when this happened, BTC typically experienced a strong rally.

However, a tried-and-true principle in investing which goes, ‘past performance does not guarantee future results’, must be exercised with caution here. This is especially important in a year such as this, where the world has been shaken and seem to be heading into unchartered territories.

Young also reported that the options market is pricing a 22% chance of BTC/USD to hit $120,000 by 2021.

Based on the chart today, analyst Anil Pachal from FX Street opined that a bullish channel on the four-hour chart and a positive Moving Average Convergence Divergence (MACD) is indicating that hitting $30,000 is imminent. However, a pullback near $30,150 can be expected based on the overbought RSI conditions.

In related news, the Indian government is considering imposing an 18% service tax on all future transactions. Bitcoin would be classified as an intangible asset class, which means a Goods and Services Tax or GST, could be imposed on all transactions.

As the curtain closes on the historic year of 2020, traders remain mixed about BTC/USD in the year 2021. If there is one thing that this year has shown us, it seems that there is growing confidence among retail and institutional investors in cryptocurrencies in the midst of the world’s economy shaking.

In the nearer term, the outcome of the U.S. pandemic relief cheques, the smoothness of Joe Biden’s transition into the Oval office, and the number of new Covid19 cases against the progress of the vaccine would be key market movers for BTC/USD as the new year begins.

BTC/USD (as of Dec 31, 2020, 10.10 a.m. GMT +8) - $29,169.66

FOLLOWME User Sentiment (as of Dec 31, 2020 at 10.15 a.m.)

Short – 80.21%

Long – 19.79%