Comments by Yuri Mazur, Head of Data Analysis Department of CEX.IO Broker
PayPal announced the launch on Thursday support for bitcoin for all account holders PayPal in U.S. jurisdictions.It is likely that this announcement contributed to the jump of the BTC/USD pair to the area of 16,300 at the end of Thursday's trading session.
The fundamental reason for the rapid growth of bitcoin in the last few months is the growing interest from large companies represented on the New York and London stock exchanges.One of the leaders of the business intelligence market, the American company MicroStrategy in August-September 2020 acquired a total of 38,250 bitcoins.Her example was followed by the company of the founder of Twitter Square, buying bitcoins for 50 million dollars.Also on October 21, the British company Mode Global Holdings PLC spent 10% of corporate capital on the purchase of bitcoin.
On October 24, an upward wave began, whichcontinues to this day. Therefore, from a purely chronological point of view, the pattern between these transactions on the part of the aforementioned companies and the subsequent Bitcoin price dynamics looks very obvious.
As for the technical picture, the daily level of 10,196 on the BTC/USD chart provided serious support to the pair after a strong fall in early September, as well as October 23.This level had a very large driving force, and in the end the combination of favorable fundamental background and the support provided by this level, determined the upward dynamics of BTC/USD.
Institutional Demand for Bitcoinis connected, first of all, with the desire of business and investors to protect their capital from inflation, which is gaining momentum this year in the context of a pandemic and the extensive measures of economic support forced by developed countries, which are expressed in significant monetary compensation for business and citizens. This, in turn, will inevitably lead to higher inflation.
Bitcoin's technology device is also an excellent mechanism to protect capital frominflation because its emission is limited and cannot be accelerated or slowed down because it is determined by the blockchain protocol.That's why this asset attracted the attention of major market players as a toolprotection against inflation.
Various legislative initiatives will be,will certainly contribute to wider adoption of bitcoin, in the legal field as well as in the global economy. Especially significant in this case will be the most economically developed jurisdictions, such as the United States, the European Union, Canada, Australia, Japan.
In the future of 2020, it looks likely to reach the mark of 18,000 dollars.If we talk about the further development of the price dynamics of bitcoin, in 2021 it is worthexpect traffic to a historic high of $21,000 in 2017.If it is achieved, a correctional motion, the significance of which at the moment, will be highly likelyit's hard to assess.
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