Daily Market Recap - BTCUSD consolidation over, new record highs on the way?

Bitcoin's value surpassed $1 trillion on Tuesday, as prices jump back above the $50,000 mark. This is the second time this has happened after reaching that capitalization on February 19 and BTCUSD appears to be establishing a new level of support at $50,000.

Bitcoin's recovery has been attributed to several factors, including the participation of large institutional investors and some notable corporate purchases. Tesla, Square, and Microstrategy are among the companies that have moved to buy. Goldman Sachs could also be seen getting back into cryptocurrency trading.

On Sunday, a Chinese app maker called Meitu said it bought not only bitcoin, but another cryptocurrency called ether. Companies are also making acquisitions in the cryptocurrency space. On Monday, PayPal announced that it would buy cryptocurrency security company Curv.

Supporters of bitcoin often compare it to “digital gold,” a hedge against inflation and a potential “safe haven” asset where investors can park their money in times of political or economic turmoil.

Crypto-currencies could benefit from accommodative monetary policies in major economies, such as low-interest rates and asset purchases by central banks, which are eroding the value of fiat currencies such as the U.S. dollar, and in this context, bitcoin offers a better alternative for investing.

According to a survey conducted by Goldman Sachs, 22% of respondents expect to see bitcoin at USD 100,000 by the end of 2021.

From a technical perspective, the upward target is set at the all-time high of 58,354 and immediate support to be expected at 52,170. This kind of range for any other would-be considered wide though this is Bitcoin after all. With monthly swings of 40 to 50% considered common, and an astonishing 300% rise since the end of 2020, a new break above the 58,000-mark set the stage for BTCUSD to trade at 80 to 90,000 by the end of the year.

(Chart Source: Tradingview 11.03.2021)

Looking ahead, the crypto-currency market remains well anchored in the minds of investors with the asset class becoming increasingly institutional and demonstrating its positive correlation to risky assets, especially with the equity market.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.