The price of Bitcoin has just reached a new annual high and traders expect the price to continue to rise further for 3 key reasons.
On October 21, the Crypto Bull review price (BTC) broke through the $13,000 mark to reach $13,217 after traders broke through key resistance levels at $11,900, $12,000 and $12,500 in the last 48 hours. While there are several technical reasons behind this sudden upturn, there are three key factors that are driving the rally.
Bitcoin price exceeds USD 13,000 after PayPal’s entry into crypto space
The three catalysts are a favorable technical structure, PayPal allowing the purchase of cryptomoney and the increasing rate of dominance of Bitcoin.
PayPal’s announcement adds to Bitcoin’s momentum
Earlier today, PayPal officially announced that it will allow its users to buy and sell crypto currencies, including Bitcoin.
10% of Bitcoin’s supply has remained intact for more than 10 years, according to a report by Glassnode
Over the past year, speculation about the possible integration of cryptomoney into PayPal has intensified steadily after several news stories claimed that the company was working to make it possible.
In an official statement, Dan Schulman, president and CEO of PayPal, confirmed the integration of cryptomoney. He wrote:
„We look forward to working with central banks and regulators around the world to offer our support and contribute significantly to shaping the role that digital currencies will play in the future of world commerce and finance.
Following PayPal’s announcement, Bitcoin’s price immediately increased from around USD 12,300 to an annual high of USD 12,900.
Sui Chung, CEO of CF Benchmarks, a subsidiary of the Kraken exchange, told Cointelegraph that it is possible that bullish sentiment will return to the crypto market. According to Chung:
„Bitcoin exceeding USD 13,000 today, a 16-month high, shows that this trend is only accelerating. The fact that PayPal, a familiar name, has received a conditional BitLicense is probably driving the bullish sentiment. Today is an important indicator for further price appreciation in the future … the point at which conventional media and ‚family‘ retail investors may soon start showing interest in the asset, as they did in late 2017.
Bitcoin’s dominance is increasing
Last week, Bitcoin surpassed the altcoins, the tokens of decentralized finance (DeFi) and Ethereum.
Josh Olszewicz, a technical analyst of cryptomontages, said BTC’s dominance is above a key moving average. Technically, this suggests that Bitcoin could continue to outperform altcoins in the short term. Olszewicz said:
„The BTC domain is again above the 200-day moving average for the first time since May, King Corn is back.
Bitcoin shows a bullish structure in the longer time frames
Throughout October, traders have identified a favorable technical structure for Bitcoin in the longer time frames.
Data shows that professional traders opened short positions when the price of Bitcoin exceeded $12,000
The weekly Bitcoin chart, in particular, shows a breakout and how the previous local high reached in mid-August was exceeded.
Weekly chart of the BTC/USD pair.
Two months ago, BTC reached USD 12,468 at Binance and dropped to less than USD 10,000. As mentioned above, today’s volume increase brought the price to a new annual high of USD 13,217, which is well above the previous local high.
Bitcoin price rises to USD 12,900 as PayPal opens crypto currencies for everyone
In the short term, traders expect the market to cool down after such a strong move. Flood, a pseudonymous trader in cryptomone futures, said:
„I think we are pretty overextended in $BTC for now. I guess we’ll see a little bit of a reversal where we’ll try to find support in the $12,200 to $12,000 range. I’m not saying we can’t go further, but we can cover a little bit here“.