Q3 2020 Recap: Bitcoin Continues Rising Despite Global UncertaintyLike most assets in different global financial markets, the flagship cryptocurrency continues rising against the uncertainty generated by the ongoing pandemic and the upcoming U.S. presidential elections.
Bitcoin Investors Gain 18% Returns in Q3
Bitcoin provided investors the opportunity to grasp a Q3 return of more than 18% even with the substantial losses that came in September. Although the so-called “September Effect” was quite significant, it seems like nothing can prevent BTC from achieving its upside potential.
The pioneer cryptocurrency kicked off the third quarter of the year, hovering around $9,134.88. While prices were mostly contained within a narrow trading range throughout July, the Bollinger bands squeeze on the daily chart suggested that a major price movement was underway. It was until the end of the month that a breakout finally materialized.
Indeed, Bitcoin was able to slice through the $9,500-$9,000 trading range in an upward direction on July 22nd. The breakout was followed by a considerable spike in the buying pressure behind BTC, allowing prices to shoot up by nearly 31.50%. By August 17th, the bellwether cryptocurrency had made a new yearly high of $12,475.91.
Such a milestone was met with a high number of sell orders that were able to contain rising prices at bay. What followed was a 10.80% nosedive that saw Bitcoin retrace to $11,130.34. This price hurdle served as strong support, letting prices rebound and take another aim at the infamous $12,000 resistance level.
On September 1st, BTC had surged 8.43% from the support level previously mentioned to move just a few dollars above the $12,000 mark. But just as it has happened since 2010, it seems like the “September Effect” came into play, crushing bulls’ dreams of higher highs. The exponential increase in sell orders across the board pushed prices down by 18.38%.
As a result, Bitcoin dipped below the psychological $10,000 support level for the first time since July. Sidelined investors seem to have taken advantage of the low prices to re-enter the market. As buy orders began to get filled, BTC was able to recover some of the losses incurred and close Q3 at $10,791.74.
Uncertainty Reigns in the Market
Regardless of the significant returns that Bitcoin was able to generate in Q3, investors remain uncertain about what the future holds. U.S. President Donald Trump has tested positive for COVID-19, and his ability to participate in the upcoming elections may put in danger the stability of the global financial markets. Even though Bitcoin has served as a hedging asset before, it remains to be seen how it will react to the U.S. presidential elections’ results.
From a technical perspective, BTC’s price action will be decided by its ability to break out of the $11,130-$10,330 range where it has been contained over the past two weeks. On the upside, it would likely aim for the $12,500 resistance level, but if sell orders begin to pile up, Bitcoin could plunge to $9,500. Therefore, it is imperative to wait for a clear break of this trading pocket to determine whether the uptrend will resume.
Konstantin Anissimov, Executive Director at CEX.IO