Bitcoin (BTC) price hit a new all-time high on Wednesday, breaking above the $20,000 mark and reaching as high as $23,777.
Fundamental analysis: High demand
Bitcoin’s rally this year is different from its previous ones, according to many experts, as this time it was fueled by surging institutional adoption and coronavirus-induced circumstances.
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“There will be a search for alternative currencies due to constant fiat money debasement,” Deutsche Bank analysts wrote in a note.
“It does feel that bitcoin will continue to be in high demand.”
The pandemic has left a huge scar on the global economy and industries around the world, resulting in a large number of layoffs and shutdowns of operations. As a result, global central banks were required to react with an unprecedented monetary and fiscal stimulus which involved printing trillions of dollars.
While the stimulus has certainly helped in the short-run, many investors got concerned that traditional currencies like the USD will lose their purchasing power, prompting some of them to invest in Bitcoin.
“Increasing institutional adoption will further support this rally and should easily help prices consolidate, setting the stage for a run towards $25,000 as we head into the new year.” Denis Vinokourov, chief researcher at the digital asset firm Bequant in London, told Forbes.
Technical analysis: Fresh target locked
The latest rally means that Bitcoin is up by about 217% year-to-date despite correcting to $3,900 when the markets collapsed amid the coronavirus outbreak. BTC/USD is up over 18% in December only, just a month after gaining 42.6%.
The BTC buyers have now hit all short-term targets as they continue to head higher towards the next midterm target at $24.150. This is a Fibonacci 127.2% extension line of the drop from previous all-time highs to December lows. The next Fibonacci extensions comes just below the $30,000 handle.
Bitcoin price hit a new all-time high of $23,777 on Wednesday, registering a 217% surge in the price action since the start of the year.