PayPal possibly fueled the fire, positive public perception sparked
As we made note of earlier this month PayPal’s announcement that Bitcoin will be supported on its platform morphed the 2020 bull run into a parabolic rise towards all-time highs. Paypal a trusted payment solutions company that continues to beat out competitors or acquire them in many cases now offers seamless access to buy, sell, and hold Bitcoin with their application for their over 300 million users. Three weeks after this new feature PayPal has been buying up around 70% of newly minted Bitcoin, according to Pantera capital.
PayPal partnered with the firm Paxos for custody and trading of crypto assets through their exchange. Paxos is the founder of the online crypto exchange itBit. The online exchange has been around since 2013 and has seen trading volume more than double since PayPal’s announcement. While many journalists have reiterated the line “PayPal buying 70% of newly mined Bitcoin” I think a closer look at the data is warranted. According to Coinmarketcap.com a website that compares the market cap and other metrics of different cryptocurrency coins or tokens as well as exchanges. According to Coinmarketcap.com today, itBit ranked 131 in terms of 24-hour trading volume accounting for a meager $28 million of Bitcoin’s total market cap which sits at almost $200 billion.
Regardless of major media outlets that were spewing out metrics with little or no oversight into legitimizing these claims. Presenting readers today with a skewed view of what’s happening across broader markets added to an influx of the already huge demand for Bitcoin. The supply side which adds approximately 900 Bitcoin every day into existence has been unable to keep pace with growing demands, this has served in continuing Bitcoin’s surge to higher prices.
PayPal is trading higher by 2.68% on the day as of 4 PM, EST at $206.20 per share which is only $6 from its record high close that was hit on Oct. 21st the same day they made public their cryptocurrency adoption plan on their platform as well as Venmo a popular payment app that is one of many other competitors that were acquired by PayPal.
On the same day that PayPal hit all-time highs, Bitcoin surpassed $12,500 a strong area of resistance that Bitcoin had been unable to breach for nearly 15 months. Since the crash of 2017-2018 when Bitcoin fell hard and fast from $20,000 Bitcoin had only closed above the level of $12,500 two times.
The current rally in Bitcoin has been flying higher as PayPal so far hasn’t seen much increase in their stock price as of yet. So obviously there are more things at play here taking BTC higher and looking at a daily candlestick chart there is one other large green candle that came in along this current rally that came in three months before Oct.21st. The candle I am referring to came in on July 27th and was probably the most significant technical achievement for Bitcoin bulls to this very day. The approximately 8% gain on that day took Bitcoin futures above the descending top that defined the price action for the entirety of BTC futures before that day. It also took Bitcoin past the key psychological level of $10,000, after which BTC has not once closed beneath serving as strong support from which BTC used as a jumping-off point for its current ascent towards a new record high.
These technical accomplishments made the foundation for higher pricing in which the recent fundamental developments have built upon. In short PayPal’s adoption of Bitcoin served as fuel for the current rally among many other developments. But without first overcoming critical resistance areas that made these moves possible by taking Bitcoin from a risky bet to a safe and lucrative one in the minds of investors, institutions, and independent thinkers the fuel would have not had enough force to launch prices so fast. This news I believe is driving an overly optimistic market growing too fast and too furious even for Van Diesel. Just as the 2019 rally that began shortly after Square announced a similar adoption plan of Bitcoin This rally will contain all the volatility and range of human emotions indicative of parabolic rises. The difference being this time the drivers are more stable and likely to hold BTC above $10,000 when it does finally correct.