KEY POINTS

  • Bitcoin’s recent rally was attributed to Tesla’s BTC purchase announcement
  • Bitcoin was briefly rejected at $50,000
  • Anthony Scaramucci said the price should go up soon

With Bitcoin continuing to rally to new all-time highs every week, questions remain regarding whether it can break $50,000 after the first effort was met with immediate resistance.

On Sunday, Bitcoin traded as high as $49,714, a new all-time high, before closing at an all-time daily high of $48,680. The following day, however, a reversion occurred, with Bitcoin currently trading at $46,731 at the time of writing. There was a clear sell volume, and many investors might be looking to profit at a perceived psychological resistance of $50,000.

Still, this bearish move is considered short-term. Bitcoin’s price has skyrocketed from the low $3,800 of March 2020 to Sunday’s new all-time high. Over the course of 2020, high-profile corporations including MicroStrategy and Square have put Bitcoin in their reserves. At the same time, institutional investors like Guggenheim and MassMutual have allocated a portion of their portfolios into Bitcoin.

The cryptocurrency’s recent run, however, was attributed to Tesla’s announcement that it has invested $1.5 billion into Bitcoin. In a filing with the Securities and Exchange Commission, the company confirmed the purchase, which it said could give Tesla more flexibility and more ability to maximize its cash returns. Tesla also announced it will soon accept Bitcoin payments for its products. 

At the time of the announcement, BItcoin’s price shot up above $40,000, when many believed it would stay in the $38,000 level for a prolonged period. The “Tesla”-induced rally may have ended with a rejection of $50,000, but according to NewsBTC.com, there is support at $45,000. That price level must be sustained or the next price to keep an eye on would be $41,000. 

For Anthony Scaramucci, founder of SkyBridge Capital, said within the next 12 months, Bitcoin could reach well past $50,000 and eventually $100,000.

“Bitcoin is unfettered by Federal Reserve policy or gold supply issues. There is more demand for Bitcoin now than supply. The price should go up,” he told CNN Business

Due to the weakening of the dollar and the interest rate cuts by the Federal Reserve, Bitcoin has become an attractive currency, CNN Business reported. The publication highlighted the dominant cryptocurrency’s supply limit — there will only be 21 million BTC, and roughly 18.5 million of them have been released. Coupled with increasing demand and decreasing supply, many investors think the price of Bitcoin will only increase.

Bitcoin in Emerging Economies This picture shows a person holding a visual representation of the digital crypto-currency Bitcoin, at the ‘Bitcoin Change’ shop in Tel Aviv, Israel, Feb. 6, 2018. Photo: JACK GUEZ/AFP/Getty Images

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