Here’s why April may be the best month yet for Bitcoin price
The US dollar is starting to weaken again, with sellers pushing the US dollar index (DXY) lower, which could boost bitcoin’s (BTC) momentum in the near term.
Alternative assets like bitcoin and gold are valued against the dollar. So when the DXY begins to decline, it often leads to a rally in BTC against the dollar.
BTC/USD (orange) vs DXY (green). Source: View of the shop
The dollar’s share of world reserves is falling rapidly
According to Holger Zschaepitz, market analyst at Die Welt, the US dollar’s share of global reserves is falling rapidly as countries like Russia adopt a de-dollarization strategy and switch to gold.
When the pandemic was announced in the first quarter of 2020, demand for dollars shot up as investors flee to cash because it is the world’s reserve currency.
However, due to several factors, including the presidential election and COVID’s negative outlook over the past year, the dollar has struggled to outperform other currencies, such as the Japanese yen and the Swiss franc.
HAPPY! The dollar is falling. Although the dollar’s share of global reserves initially increased at the start of the pandemic, it has since fallen to 59%, its lowest level since 1995. Part of the decrease was due to the depreciation, but also to active selling in US dollars.
If the US dollar continues to fall, there is a good chance that bitcoin will continue to rise in April.
Historically, April has been a strong month for bitcoin over the past decade, with five consecutive years of positive growth since 2016.
April is a good month for
– Bitcoin Archive (@BTC_Archive) 29. March 2021
In addition, Danny Scott, CEO of bitcoin exchange CoinCorner, said that the law of averages sees bitcoin at $83,000 in April. He wrote:
Law of averages gives #Bitcoin an April price target of $83,000. 10-year average in April +51%.
Miners seem to be hoarding bitcoins
Among the macroeconomic factors favoring bitcoin, Lex Moskovsky, CEO of Moscow Capital, noted that miners have recently begun to increase their holdings of bitcoins.
Miners added 4,380 bitcoins in one day, which the trader and quantitative investor called an uptrend. He said:
The miners have really started to build up their position. 4,494 #Bitcoin stacked on the aggregate today. 4380 additional #Bitcoin were stacked by miners yesterday. It looks like a trend. Change in net position of mining companyBTC. Source: Glassnode
When miners sell their holdings, bitcoin usually suffers a setback, as this can lead to a cascade of orders in the highly leveraged futures market.
When miners collect bitcoins and stack BTC in the hopes that the cryptocurrency will increase in value, it reduces the chances of a major collapse in the near future.
In the short term, the question is whether bitcoin will stay above the $58,000 support zone. If it continues to consolidate above this level, the likelihood of a strong breakout above the $60,000 resistance level increases significantly.
frequently asked questions
How much will bitcoin be worth in 2020?
Bitcoin will rise above $100,000 by 2021. The year 2020 has been a momentous one, especially for bitcoin.
What was the highest price for 1 bitcoin?
The price of bitcoin (BTC) has reached a record high of nearly $50,000.
Will bitcoin rise in 2021?
2021 will be very similar to 2017, which means bitcoin is expected to do even better in 2021 than it did in 2020, just over 300 percent, Lee told CNBC. After a strong 2020 in which bitcoin reached an all-time high with gains of around 300%, 2021 could be even stronger.