- Bitcoin broke out of a narrow technical range to close above $9,300 this Tuesday.
- The jump appeared after the European Union leaders confirmed a €1.8 trillion ($2.06 trillion) stimulus package.
- The cryptocurrency now eyes bullish continuation beyond $9,400, a resistance level it failed to break twice in the last three weeks.
Bitcoin jumped on Tuesday as European Union leaders reached a historic agreement on a stimulus package earlier this morning.
The BTC/USD exchange rate was up 1.85 percent to circa $9,330 as of 1016 GMT. At its intraday high, the pair was trading at $9,367. Meanwhile, all the top coins tailed Bitcoin’s upside moves, with Ethereum, XRP, Chainlink, and others rising within the range of 1-3 percent.
Another Financial Aid
A summit among European bloc’s 27 leaders in Brussels went into its fifth day – its most extended summit in 20 years – to discuss the region’s next economic course amid COVID-induced slowdown. The eventual outcome came out to be a €1.8 trillion ($2.06 trillion) stimulus package.
While the so-called EU deal awaits further confirmation from the parliament of member states, the stock market reacted positively to the first signs of financial aid. The pan-European STOXX 600 index went up by 1.1 percent while Germany’s DAX jumped 1.9% higher.
Bitcoin price breaks out of its Triangle range. Source: TradingView.com
A similar upside sentiment rippled across the Bitcoin market. The cryptocurrency surged higher ahead of the European opening bell in anticipation that a stimulus package deal would reduce the cash demand in the eurozone.
The same outlook in the US had earlier sent the Bitcoin price higher.
Bitcoin Breakout or Fakeout?
Bitcoin’s latest jump also took its price out of a contracting Triangle range. The pattern’s upper trendline, as shown in the chart above, earlier capped the cryptocurrency from extending its upside momentum. With it now broken, some chart watchers noted that the price could surge higher.
Cryptocurrency analyst Michaël van de Poppe stated that the BTC/USD exchange rate could reach $9,600 or beyond in the coming sessions. Meanwhile, Bitcoin stock-to-flow creator PlanB envisioned BTC/USD at $25,000, citing the pair’s growing correlation with the S&P 500.
S&P500 and Bitcoin have been correlated and co-integrated last 10 years. S&P implied BTC price: $25K .. interesting times ahead! pic.twitter.com/mi8gLmKcmf
— PlanB (@100trillionUSD) July 21, 2020
Mr. Poppe, meanwhile, noted that there could be downside correction ahead. The analyst said BTC/USD, for now, is “hopping around,” adding that traders are still focusing on altcoins to deliver an extended bull run after last week’s explosive rally.
BTC descending channel. Source: Crypto Hamster, TradingView.com
“The descending channel has been broken to the upside on a higher volume,” said another analyst. “Let’s see if the resistance will become support or that was a fake breakout. It could be [a nice] long entry if that support holds.”