Bitcoin was lower, pausing a powerful rally that has seen the largest cryptocurrency jump 25% in October to the highest levels since June 2019. Traditional financial-media outlets like Bloomberg News were writing about it.
Prices appeared to hit resistance just below $13,900, close to last year’s high. But analysts said that if the level is breached, there appear to be few brake points before the 11-year-old cryptocurrency ascends to $14,000 or beyond.
“Between the levels of $14,000 and $20,000, there is insufficient price data to single out any specific points of resistance,” Mati Greenspan, founder of the foreign-exchange and cryptocurrency research firm Quantum Economics, told subscribers in a newsletter.
In traditional markets, European stocks dropped to a five-month low and U.S. equity futures were declining, amid investor concerns about rising coronavirus case loads. Gold weakened 0.4% to $1,900 an ounce.
Bitcoin‘s recent rally as U.S. stocks floundered has simply widened the cryptocurrency’s outperformance compared with traditional markets. As more investors tune in, the expanding gap could become a self-reinforcing trend.
Following Tuesday’s price surge to a new 2020 high around $13,700, bitcoin is now up 90% for the year to date. That puts the cryptocurrency well on pace to exceed last year’s 94% gain.
It’s also far ahead of the Standard & Poor’s 500 Index of large U.S. stocks, where a recent slide has trimmed the year-to-date gains to just 5%, after a 27% rise in 2019.
Many big institutional investors, such as pension funds, are under pressure to hit annual return targets of 7%, and with stocks now faltering and bond yields close to historic lows, they’re casting about for alternatives. Bitcoin’s track record alone might be enough of a sell, but the 11-year-old cryptocurrency also represents what could be the beachhead of a brand new, state-of-the-art financial system – the digital rails, as the…