At the beginning of this month Bitcoin (BTC) broke through the $12,000 long term resistance level, and all eyes turned towards long term resistance at $14,000, and there was plenty of speculation that Bitcoin (BTC) could even rally to the all-time high of $20,000. Indeed, since March Bitcoin (BTC) had been in an impressive bull run which led to gains of hundreds of percent.
However, the crypto market suddenly turned sour on September 2, simultaneous with a sudden crash on the stock market, and Bitcoin (BTC) ended up declining below its long term support level at $10,000, sparking fears that a bear market may be taking shape.
Also, the Decentralized Finance (DeFi) craze cooled off for the first time in months, with total value locked declining from a record $9.6 billion to $6.8 billion.
The good news is that it appears the crypto bulls are back. Bitcoin (BTC) has managed to rise up to $11,000 once again, and now all eyes are once again on the $12,000 long term resistance level, to see if Bitcoin (BTC) can once again break that level, and truly get past it.
Also, the DeFi craze is back in full force, with total value locked rising back up to $9 billion. Indeed, it seems DeFi total value locked is poised to set new record highs in the coming days.
As for the reason for this rally, it seems the fundamentals that drove the crypto bull run since March remain in place, including the May Bitcoin block halving, the DeFi craze, and global economic flight to safe haven assets. The one thing that changed in recent days is that the stock market is once again rising, and now that the panic on the stock market is over, there is no longer downward pressure being applied to the crypto market.
Essentially, crypto and stocks are highly correlated right now, and since the stock market has recovered from its crash earlier this month, crypto has recovered as well.
Thus, it seems this year’s crypto bull run continues, and it will be critical to watch the $12,000 resistance level for Bitcoin (BTC) over the coming weeks, since if Bitcoin (BTC) can break that level then a much bigger rally may be in store.