KEY POINTS

  • Bitcoin breaches past $12,000 for the first time this October
  • Traders are observing whether this level will be sustained
  • Institutional acceptance and public companies buying Bitcoin are positive catalysts to the price hike

Bitcoin has surpassed the $12,000 resistance for the first time this October, and analysts are expecting further upside if this level is flipped to support and gets sustained.

While Bitcoin closed at $11,923 Tuesday, it did reach as high as $12,050 on that day and as of press time, the benchmark cryptocurrency printed a green candle now priced at $12,771, the highest price it has achieved since Sept. 2. 

According to Simon Peters, an analyst at investment platform eToro, while Bitcoin looks poised to close above $12,000, traders should first observe if the price would remain above $12,000 for a longer period of time before declaring a bull run. “Then, investors should look to $14,000 as the next target,” he told Forbes.

This was echoed by other analysts, such as the trader who goes by the name of “Salsa Tekila” on Twitter, saying that they will be careful in trading within $12,000. 

Another trader named “Byzantine General” on Twitter said traders should not short the current run. “The books are super thin above 12k. If it breaches, don’t try to short it. It’s like standing in front of a freight train.”

The primary driver of the price increase are traders in the spot market. This was different from previous bull cycles that were driven mostly by the futures market, led by BitMEX and Binance, per Cointelegraph.

Forbes noted that while Bitcoin has been volatile all throughout the year, a couple of positive catalysts enabled it to weather any decline in the stock market, which trends in tandem with benchmark cryptocurrency in the last few months. The publication cited greater institutional acceptance as well as a number of public companies investing in Bitcoin. Among these companies is Square, which invested $50 million in Bitcoin.

Another major news that directly preceded the run to $12,000 was when Jerome Powel, the chairman of the Federal Reserve said that while the United States is clearly studying central bank digital currencies (CBDCs), it is more important for the country to get it right the first time rather than be the first one to release it. He noted that the U.S. dollar is the global reserve currency, which means anything related to it will have effects worldwide. The Fed chair’s statement struck a chord with cryptocurrency enthusiasts, who said there already exists a global and decentralized digital currency in the form of Bitcoin.

Bitcoin In this photo illustration a visual representation of the digital currency Bitcoin sinks into water in London, England, Aug. 15, 2018. Photo: Dan Kitwood/Getty Images