Market Overview

15 April 2021

Bitcoin Gains New Highs as a New Classic Currency

Markets may have gotten used to Bitcoin, the first digital currency, reaching new highs over recent months. So,  the fact that Bitcoin reached a new fresh record at $64,374 on April 14 may not seem so sensational any more, even with a heartbreaking upside movement by 5.5% in a single day on April 13.

This may be another reason  why the perception around digital currencies seems to be changing. The rise of the Bitcoin in 2020 was more related to the extremely risky nature of digital assets that gained amid global lowering of interest rates and money printing stimulus measures worldwide with the Greenback losing its strength. Moreover, this kind of  nature of Bitcoin is still in place. But it would not be enough to boost Bitcoin prices from $29,000 to the recent records in three months, even if the above mentioned external conditions for the first digital currencies remains intact.

The underlying reason behind this rally seems to be that digital currencies are increasing their functionality towards becoming a classic currency. Bitcoin has recently acquired new and wider functions as a medium of circulation, payment and savings. It is accepted as a payment method by large corporates while also becoming an instrument of investment by large companies and banks, such as, the Bank of New York Mellon, Mastercard, Tesla and others.

The previous rally of Bitcoin from $38,000 to $58,000, or by 52% in two weeks, this February was related to the statement by Elon Musk that Tesla has acquired Bitcoin for $1.5 billion and is going to accept this digital currency as a payment for its production, including its famous electric vehicles. This unexpected move by large automaker Tesla seemed to push Bitcoin’s reputation beyond the limits among its devotees and increased its practical applicability, creating a precedent for many to follow.

Another rally happened just before the largest digital currencies exchange Coinbase listing on the Nasdaq index. The digital exchange market cap hit the large figure of $85 billion compared to the market cap of the Nasdaq index itself at $26 billion. With this listing the exchange of digital currencies has seen to receive a landmark recognition by civilised investors society.

The technical picture may suggest that Bitcoin prices may continue to rise to the next price targets at $65,000-66,000 per coin. However, Bitcoin is looking overvalued regarding the pace of its rally. Positive factors that are favourable for Bitcoin are already priced in by the market. So, the consolidation of the price with possible correction to strong support levels at $51,000-56,000 may be expected.

 

Disclaimer:

Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.

Open Forex Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.42% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2021 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Telerade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Telerade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.42% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.