This Rally In Bitcoin Is Real
PayPal, the giant e-wallet provider has recently announced they will be welcoming Bitcoin, Bitcoin Cash, Ethereum, and Litecoin transactions on the platform. But while this created a generally positive vibe around Bitcoin, some voices expressed concern regarding PayPal’s centralized business model and the narrow freedom given to crypto users.
The limitations imposed by PayPal are much bigger than some of us may expect: users will not be able to pay for purchases with cryptocurrency and will not be able to send coins. Also, they will not be able to withdraw to their own wallet or to deposit crypto into their PayPal accounts. That leaves us with only buying and selling, which can be used only for speculative purposes: buy now to sell later, when price is higher. In other words, although at first, this seems like one of the year’s biggest adoption news, when you look closer, you realize that the limitations are “destroying” the decentralization concept.
But there is hope! According to PayPal’s FAQ page, they plan to introduce some of the missing features later down the road, however, the timeline is not specified. Also, according to Bloomberg, PayPal is looking to acquire Bitcoin custodian BitGo, a move that would show they are serious about cryptocurrency adoption and would indicate that more features (such as deposit/withdrawal, etc.) may become available sooner rather than later.
Chart Analysis – BTC/USD
Bitcoin posted a 13.90% gain over the last 7 days and at the time of writing, it is trading at 12,940 against the US Dollar, after briefly surpassing the key level at 13,000. The current price was last reached in July 2019, thus the breakout is a significant one, and we can safely say that the main sentiment is bullish.
Although we can expect further upside movement, it is very possible (and normal) to see a small dip in the short term. After pausing a short while at $11,150 support, price took off and quickly climbed to $13K, without any type of retracement. Usually, strong moves in one direction are followed by retracements in the opposite direction and this idea is also backed by the position of the Stochastic on a Daily chart (overbought and appearing to cross downwards).
The MACD on a Daily chart is still moving strongly up, but keep in mind this indicator is slower than the Stochastic, and on a 4-hour chart, it is already crossing downwards, thus increasing the probability of a retracement. The first target (and possible support for a pullback) is located at $12,500, which is the previous high, but also a psychological level.