KEY POINTS

  • Bitcoin jumps to $13,200 after news of PayPal allowing buy and sell of cryptocurrency on its platform
  • Bitcoin has reached its all-time high against the currencies of Brazil, Argentina and Turkey
  • Analysts expect a period of profit-taking before the price rally resumes

For two straight days, Bitcoin was trying to reclaim the $13,000 level and even surged to $13,200 on both occasions, triggering new 2020 highs. Its price hit a new record high in Brazil, Argentina and Turkey.

As Bitcoin continues to get sustained above $12,000, many analysts expect a short pullback before the rally resumes. 

Bitcoin made a brief stop above $13,000 in the last two days, peaking at $13,200 both times. Sentiment has turned very positive after news broke out that PayPal will support cryptocurrency buying and selling on its platform. With Bitcoin traded in multiple markets, it has reached an all-time high in multiple countries. In Brazil, Bitcoin has traded at 70,000 Brazilian real, topping its record from December 2017. 

A similar trend is seen in Argentina, where 1 BTC is trading for 1 million Argentina peso, and in Turkey, where 1 BTC is trading for 100,000 Turkish lira. Rampant inflation has led to the devaluation of these fiat currencies against the greenback.

The current value of Bitcoin means the majority of its holders are in profits, Cointelegraph reported. Because of that, it is possible that many of these holders will take some cash out. Denis Vinokourov, head of research at broker Bequant, it will depend on whether net inflows into the market will offset the profit-taking phase from existing investors.

If the profit-taking does happen, analysts expect the next BTC range level to be between $12,500 and $13,500 and the benchmark cryptocurrency may stay there in the next few months before another breakout. They say at this point, there is little price discovery because Bitcoin has not stayed above $13,000 for most of its eleven-year existence.

If a breakout happens, there are only two likely catalysts. First is another large institution announcing support for Bitcoin, like PayPal, or allocating a portion of their reserves to the benchmark cryptocurrency like MicroStrategy and Square. The second is institutional demand, long been touted to be the catalyst for Bitcoin to reach new all-time highs.

Bitcoin jumped more than 15 percent to just short of $10,000 following Xi Jinping's comments Bitcoin jumped more than 15 percent to just short of $10,000 following Xi Jinping's comments Photo: AFP / KAREN BLEIER bitcoin-2007769_1920 Bitcoin Photo: Bitcoin Bitcoin in Emerging Economies This picture shows a person holding a visual representation of the digital crypto-currency Bitcoin, at the 'Bitcoin Change' shop in Tel Aviv, Israel, Feb. 6, 2018. Photo: JACK GUEZ/AFP/Getty Images