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Bitcoin Sidetracks from $40,000. What Happens Now?

Bitcoin’s wild rally in 2020 was fueled by the Feds printing over $3 million to battle the COVID-19 crisis. The US dollar weakened with inflation, while BTC price soared. People discovered trading at home with brokers offering attractive no-commission services. All you need is a phone and an Internet connection to trade.

This year, the price trend continues with more money printing anticipated. US President-elect Joe Biden revealed last week his $1.9 trillion COVID-19 relief proposal, which could push Bitcoin prices further.

BTCUSD stalls at $34,437 after peaking at about $42,000 [1D], SimpleFX WebTrader

Surprisingly though, Biden’s announcement made a very weak bullish response from the Bitcoin market so far. As of writing, BTCUSD continues to trade sideways at $34,437, which is down by 20% from the new high but still up by 17% this year to date.

As people used their checks to invest in cryptocurrencies, big-time investors and Hollywood stars investing in Bitcoins strengthened the hype even more. Even billionaire Paul Tudor considers Bitcoin as the top hedge against inflation.

JP Morgan analysts have equated Bitcoin as the “digital gold” and said that it could hit $146,000 eventually. However, in the near term, if Bitcoin can’t reclaim the $40,000 level, an “investor exodus” could happen. Those who want to take profits are likely to cash out and fuel the recent correction, weakening Bitcoin’s momentum cues until the end of March.

BTCUSD performance since January 2020 [1D], SimpleFX WebTrader

The macroview and the on-chain analysis for Bitcoin give a “wildly bullish” impression to analysts like Jeff Ross from Vailshire. BTCUSD is also far above the 50-, 100-, and 200-day SMAs, showing a favorable tone. According to Bitcoin bull PlanB, the strong performance and new trading volumes could spark a run to the $48K level.

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