Daily Outlook

$11,000 Bitcoin Just Happened: What’s Fueling the Massive Pump?

The bitcoin price peaked at $11,417.11 Monday evening, up more than $1,500 on the day. At the time of writing, the digital asset was sitting on a gain of 13% at $11,233, according to TradingView. From a technical standpoint, bitcoin’s price far exceeds the 50-period and 200-period moving averages. The relative strength index on the hourly chart points to overbought conditions.

At its current price point, bitcoin has a total market cap of nearly $205.2 billion. That accounts for 63.1% of the overall crypto market, which is presently worth almost $327 billion. The rally caught the attention of mainstream media and casual traders who have grown accustomed to seeing bitcoin rejected in and around the $10,500 mark. After months of lateral moves, the largest cryptocurrency by market capitalization is finally breaking out.

Bitcoin is surging at a time when gold–the world’s most trusted haven asset– is trading at all-time highs against the U.S. dollar. In both cases, investors appear to be hedging their bets against a shaky economic recovery–one that could dismantle the stock-market rally over the medium term. While bitcoin still has a long way to go to prove it’s an established store of value like bullion, the digital currency continues to defy the odds with jaw-dropping returns. Despite being written off in mainstream circles due to its volatility and regulatory scrutiny, bitcoin is up nearly 60% year-to-date. It remains the best-performing asset of the past decade.

If bitcoin’s proponents are correct, the digital currency is about to enter another bullish cycle–one that could end with 10x returns by the end of 2021. For that to happen, adoption will have to keep growing in the face of record central-bank stimulus, ballooning budget deficits, and worsening economic conditions.

$11,000 Bitcoin Just Happened: What’s Fueling the Massive Pump?, CCN, Jul 28

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