The cryptocurrency may break the $12,118 mark as demand remains bullish
Bitcoin fell by nearly $500 to $11,546 in the 10 minutes to 10:30 UTC, after failing to absorb selling pressure above the $12,000 mark during the early European trading hours. It’s the second rejection above $12,000 in eight days, and comes as the U.S. dollar shows signs of bottoming out.
Bitcoin is on the hunt for a new yearly high, having crossed above $12,000 early on Monday.
The cryptocurrency picked up bids during the Asian trading hours, rising from $11,750 to $12,068, according to CoinDesk’s Bitcoin Price Index.
Bitcoin is trading at $12,000 just 1% short of the 2020 high of $12,118 reached on Aug. 2.
A break above $12,118 looks likely, as bullish demand can be seen in the strong hourly volume that continues to rise with bitcoin’s hike in value.
If bitcoin manages to surpass the $12,118 level, the next target would be the high of $12,325 reached early in August 2019.
Bitcoin ended last week (Sunday, UTC) at $11,683 the highest weekly close since January 2018.
That has opened the doors for further gains, according to some analysts.
The options market is also skewed bullish, with call options (bullish bets) drawing higher prices than puts (bearish bets) on the one, three, and six-month time frames.
Crypto investment firm Three Arrows Capital co-founder Kyle Davies said Ethereum decentralized finance (DeFi) ecosystem could be another catalyst bolstering bitcoin recent rally.
Davies said new projects in DeFi may be taking advantage of existing primitives for loans and trading.
Bitcoin, however, looks vulnerable to a potential bounce in the U.S. dollar, having recently developed a relatively strong negative correlation with the greenback.
Bitcoin jumped from $9,100 to $12,118 in the 13 days to Aug. 2, as the dollar index, which tracks the value of USD against major currencies, fell from 96 to a 26-month low of 92.55.
The dollar is now at its most oversold in over 40 years, according to Morgan Stanley.
The investment bank said it had exited its bearish position in the U.S. dollar.
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