Bitcoin (BTC) price breaks out to revisit January 2018 highs. Here’s why

Bitcoin (BTC) price has extended its impressive bull run today to print $14,999 for the first time since January 2018. 

Fundamental analysis: Weak dollar helps Bitcoin

Investors are betting that Joe Biden’s likely win will result in a huge stimulus package for the embattled U.S. economy. This morning, the Bank of England (BoE) increased its already huge QE plan by 150 billion pounds ($196 billion).

Paul Krugman, an American Nobel Prize-winning economist, said that the United States is in a need of a massive stimulus package to help the economy survive. 

“A lot of people are going to be out of work, a lot of businesses are going to be stressed. We need to just make life tolerable for them,” he said.

“We’re still 11 million jobs down from where we were before this thing hit and all of those people are without wages, state local governments are in extreme financial distress, thousands of businesses — maybe hundreds of thousands — are on the verge of collapse.”

In theory, a multi-trillion stimulus plan will further weaken the dollar, which should be supportive of other currencies, including Bitcoin. The dollar index (DXY) is on the way today to post the biggest single decline since March.

“We may not know what a post-election stimulus may look like, but investors continue to believe that the U.S. Federal Reserve will keep printing money at a pace that favors bitcoin’s finite supply,” John Kramer from GSR said. 

Technical analysis: A clean break takes place

Bitcoin (BTC) price logged $14,999 today to mark the highest level printed since January 2018 and a correction from all-time highs. The price action now trades comfortably above the nearest support – the old resistance – at $14,200.

Bitcoin daily chart (TradingView)

Any pullback to the lower purple zone is likely to be seen as an opportunity to buy Bitcoin. This is because the world’s largest digital asset now trades clearly in breakout territory. Unless a huge correction takes place soon, the BTC buyers are likely to target the next resistance zone at $16,200 as their next stop.

Summary

 A Joe Biden win is likely to result in a multi-trillion relief package approved by the Senate to help the troubled economy, ultimately supporting other currencies against the weakening dollar. 

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