After recovering 6.3% from a drop to $11,200 on Aug. 11, Bitcoin (BTC) price appears to be gearing up for a third run on the $12K mark.
This comes after a week of bullish news which included Nasdaq-listed investment firm MicroStrategy purchasing 21,454 BTC as protection against the weakening U.S. dollar, Coinbase exchange offering Bitcoin-backed loans, and the revelation that BlackRock and Vanguard are major holders of MicroStrategy shares.
Cryptocurrency daily market performance snapshot. Source: Coin360
The increasingly bullish sentiment extends across the entire crypto sector and proof of this comes from altcoins like Tezos (XTZ) and Chainlink (LINK) surging above previous all-time highs and a handful of DeFi-related tokens following suit.
Crypto Fear & Greed Index. Source: Alternative.me
The Crypto Fear & Greed Index currently shows that sentiment among investors is high as the indicator reads ‘Extreme Greed’. This is a sharp contrast from July when the indicator read “Fear” and crypto investors were afraid Bitcoin price would drop back into the low $10K range.
The daily timeframe shows Bitcoin continuing to make higher lows as the price consolidates into a tighter range between $11,200-$11,800. In a recent newsletter to clients, market intelligence firm, Stack Funds said:
“A retest of the $12,000 level is in sight as the formation of a bull flag crystallizes. Stack believes that the current market structure will continue to remain intact unless the $10,500 level is breached. Given the current economic backdrop coupled with the weakening dollar, we should continue to see bullish momentum moving forward for Bitcoin.”
The firm also pointed to Bitcoin’s growing correlation with gold, noting that BTC price corrected 2.7% as gold retraced by 9% earlier this week.
According to the researchers, a unique characteristic of Bitcoin is that the asset is somewhat shielded from wider market volatility as its correlation between gold and equities shifts depending on the price action with each market. Stacks Funds said:
“Despite the recent spike in BTC-Gold correlation touching March highs, the record decline in gold this week has not impacted Bitcoin price significantly, as the digital asset catches back on to the equity-like relationship to maintain its upward price trajectory.”
Bitcoin daily price chart. Source: Coin360
Altcoins also recovered well from the Aug. 11 correction and Ether (ETH) made waves managing a strong breakout above the $400 resistance level. Ether price rose by 7.88% to a new 2020 high at $430 and XRP price rose by 4.04%.
Chainlink (LINK) also reached a new all-time high after rallying 16% to $18.37.
According to CoinMarketCap, the overall cryptocurrency market cap now stands at $367.4 billion. Bitcoin’s dominance index currently at 59%.
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