Institutional investors have been increasing their holding in BTC
The price of bitcoin surged nearly 4% on Tuesday to derail the $20,000 psychological level for the first time in nearly three weeks. The BTCUSD pair briefly rallied to $20,430 before finishing around $20,100. The coin retains a bullish bias on Wednesday, albeit refrains from a more decisive ascent at this stage.
One of the main reasons behind the rally in the crypto space is the overall upbeat investor sentiment in the traditional financial markets. Wall Street stocks advanced for the third consecutive session overnight due to the ongoing decline in yields and upbeat quarterly earnings.
Meanwhile, the US dollar continued to lose ground, lacking safe-haven demand amid the rallying stocks. The USD index plunged below the 111.00 mark to find support around 110.75. Should this zone give up, the greenback may challenge October lows in the 110.00 area.
Against this backdrop, bitcoin and its counterparts enjoy a solid ascent, also buoyed by institutional investors that have been increasing their holding in BTC. In other words, asset managers helped push the price of the largest digital coin above $20,000 in recent trading.
Now, bitcoin needs to preserve the upside momentum to see further gains in the near term. Should the coin manage to stay above $20,000, traders will target the $20,500 resistance zone that capped the ascent earlier this month.
If the cryptocurrency fails to rise above $20,500, it could start a bearish correction. The immediate support area is now around $20,200, followed by the next major support near $19,800. A downside break and daily close below this area might open the road towards another test of the $19,500 zone. For now, however, bulls remain in control, with the $20,000 handle in focus.
