BTC (Bitcoin) price corrected after reaching a new all-time high

The price of Bitcoin rose to a record high of $19,918, about three years after reaching its previous record high
The world’s largest crypto currency has risen by over 170% since the beginning of the year
It is likely that the BTC price wants to trade beyond the psychologically important $20,000 handle

Bitcoin’s (BTC) price reached an all-time high on Monday to continue its impressive rally this year thanks to a surge in demand from private and institutional investors.

Fundamental analysis: increase in institutional demand

The world’s largest crypto-currency has risen by over 170% since the beginning of the year, fuelled by the growing demand for safe-haven assets as a result of unprecedented fiscal and monetary stimulus from central banks around the world and its appeal as a hedge against inflation.

“Bitcoin is a natural safe haven for those seeking protection from the rapidly increasing pressure of central bank money, and inflation, which everyone agrees is already on the rise,” said Sergey Nazarov, founder of the decentralized platform Chainlink.

Christopher Bendiksen, senior researcher at CoinShares, said that increased interest from corporations and institutional investors was also one of the factors driving Bitcoin’s rally.

“Even if it is only circumstantial, the share price actually gained momentum when the U.S. woke up this morning, which may reflect the buying pressure from retail-oriented platforms such as CashApp, Robinhood and Square’s PayPal,” Bendiksen said.

The Bitcoin market has made significant progress since 2017 as it now has a well-functioning derivatives market and custody services from major financial companies.

Technical analysis: New all-time high

The price of Bitcoin rose to a record high of $19,918, about three years after setting its previous record. Other major crypto currencies, such as Ethereum and XRP, also rose by 5.6% and 6.6%, respectively, after Bitcoin reached its new high.

Bitcoin (BTC) daily chart (TradingView)

The BTC price has now corrected about 5% from its highs to trade below the $19,000 mark under profit taking. This represents a decline of more than 8% last Friday, after peaking on Monday. It is likely that Bitcoin investors are still pushing for the price action to trade above the psychologically important $20,000 mark in the coming days.

Summary

Bitcoin set a new all-time record on Monday, extending its rally in 2020 as investors view the crypto currency as a hedge against inflation and thanks to the increased interest of institutional and private investors.