After being stuck below the long term resistance level of $12,000 for the entire first half of August, Bitcoin (BTC) has finally broken through as of the morning of August 17, and is currently trading near $12,200. It appears a powerful short squeeze is what finally cleared out strong resistance at $12,000.
Notably, Bitcoin’s price has not been this high since July 2019, which was near the peak of the big crypto rally in the summer of 2019.
Now all eyes are turning towards the long term resistance level at $14,000, which is the level which capped the major crypto rally which peaked in June 2019. It will probably be quite a battle to reach and exceed $14,000, but the exciting thing is that if Bitcoin can break through resistance at $14,000, then all-time highs near $20,000 will be fair-game for the next upward leg of the current rally.
It seems strong fundamentals are driving the current rally, and it is not just speculation. One major fundamental is the May block halving, which has drastically reduced selling pressure, since miners are only mining half as much Bitcoin as before.
The other major factor is the global economic depression, which is on a similar scale to the Great Depression if not worse. The chaos in the economy is causing more people than ever before to transfer their investments into Bitcoin as a safe haven, particularly in multiple regions around the globe, such as Turkey and Lebanon, where fiat currency collapses are occurring.
Indeed, Bitcoin is the most lucrative asset in the world by far, and considering how so many other asset classes are doing poorly amid the economic depression, this makes Bitcoin more attractive than ever before.
Also, another major factor is the decentralized finance (DeFi) frenzy, which is starting to look like a reincarnation of the initial coin offering (ICO) boom of 2017-2018, and this DeFi frenzy is driving tons of crypto investment.
On a final note, it remains to be seen what will happen today and the rest of this week. There is a chance Bitcoin could fall back below $12,000, but if it holds this level, then a sudden rally to over $13,000 seems quite possible.