Last month, I showed how Bitcoin broke above its key $10,000 to $11,000 resistance zone, which was a sign of technical strength. Since then, Bitcoin has held onto its gains, but has been consolidating in a new zone between $11,000 to $12,500. If Bitcoin can break decisively above this zone, it would be another bullish confirmation. A break back into the $10,000 to $11,000 zone, however, would be a sign of technical weakness.
In May, I showed that Bitcoin was forming a wedge pattern over the past few years that would likely result in a significant move. Bitcoin’s surge last month caused it to break out of this wedge pattern, which increases the probability of further upside (assuming that the breakout holds).
Safe-havens like Bitcoin and precious metals are benefiting from global central banks’ extremely aggressive monetary policies that have been launched to offset the harmful economic effects of the coronavirus pandemic. Ultra-low interest rates and quantitative easing aren’t going away anytime soon, which should help buoy safe-haven assets in the years to come.
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