PayPal FOMO as a Catalyst: Bitcoin at $ 20K This Week?23. November 2020
Bitcoin’s bullish fundamentals continue to overshadow the rather declining technicals. For the past week, the cryptocurrency has been on a downward slide, despite being traded well above its current rates.
At $ 18,980, BTC hit another year high, testing a three year high. Meanwhile, the momentum oscillator, the relative strength indicator, has continued to warn of “overbought” signals
The incredible upward trend took place without any specific hype. A mere look at the search term “Bitcoin” on Google Trends does not show a growing number of search queries.
By comparison, earlier Bitcoin cycles had rocketed Golden Profit searches on their way to their all-time highs in 2013 and 2017.
That explains, in a way, that the current price rally is institutional. A California-based investment firm provides evidence of how the world’s largest payments company is driving the upside.
PayPal is the new bitcoin whale
In a recently published report , Pantera Capital comments that PayPal buys the most newly mined bitcoins – around 70 percent of all bitcoins . Last month, the fintech giant launched a crypto store on its existing US platform, enabling its 300 million users to store, sell, buy and spend Bitcoin and other cryptocurrencies.
“The provider of PayPal’s crypto infrastructure is Paxos,” writes Pantera. “Before PayPal integrated crypto, itBit, the exchange operated by Paxos, handled a fairly constant volume of trading. When PayPal went live, the volume started to skyrocket. The increase in itBit volume means that PayPal is already buying almost 70% of the new bitcoins offering within four weeks of going live. ”
Together, PayPal and Square’s competitor CashApp are now buying more than 100 percent of the newly won bitcoins. This means that the crypto currency remains in a supply deficit – against the booming demand of small investors and institutions.
So it seems that the development at PayPal alone is enough to drive the Bitcoin price up by $ 2,000 this week.
Bitcoin at $ 20K
The small downward correction this weekend has shown that Bitcoin is able to hold its own against two extremely assertive sales attempts. For example, the BTC / USD exchange rate fell as low as $ 17,610 on Sunday, only to be later pushed in the other direction by solid buying sentiment.
The pair rebounded and closed trading at $ 18,437. It traded near the same level on Monday, targeting $ 18,500.