Bitcoin is pressing against the $800 mark in what has become one of the most compelling rallies the digital currency has seen in nearly three years. Trading at approximately $790 on December 18, 2016, bitcoin is within striking distance of a level not breached since February 2014, and market participants are taking notice.
TL;DR
- Bitcoin trading around $790, approaching key $800 resistance not seen since early 2014
- Chinese exchanges driving significant volume amid yuan depreciation concerns
- Market sentiment overwhelmingly bullish with 94% long positioning on Whaleclub
- India demonetization and European instability contributing to safe-haven demand
- Analysts predict further upside with some targeting $1,200 in the medium term
The $800 Battle
The $800 level has emerged as a critical battleground for bitcoin traders. After opening the week at $780.85, bitcoin has been methodically climbing, grinding through layers of sell orders stacked near this psychologically significant threshold. The price action suggests determined buying pressure rather than speculative spikes.
Market analyst Jacob Eliosoff, a cryptocurrency fund trader, noted the character of the advance: steady buying has taken several days to absorb the sell orders concentrated around $800. Once that supply is exhausted, the path higher could open rapidly, as offers thin out above the resistance zone.
Bitcoin has been range-bound for much of the past two years, trading well below the all-time highs near $1,150 set in late 2013. The current push represents a genuine breakout attempt from that extended consolidation pattern, a technical development that has caught the attention of traders worldwide.
China Takes the Wheel
Chinese exchanges are playing an outsized role in the current rally. Trading volume from platforms like OKCoin and Huobi has surged, with market observers pointing to several interconnected factors driving Chinese demand for bitcoin.
The ongoing depreciation of the Chinese yuan has accelerated capital flight concerns, with bitcoin emerging as an attractive vehicle for moving wealth beyond the reach of capital controls. While it remains difficult to quantify precisely how much of the buying reflects capital control evasion versus simple yuan exposure reduction versus pure speculation, the net effect is the same: substantial buying pressure emanating from China.
This pattern is not entirely new, but its intensity in December 2016 is notable. The Chinese government has been gradually tightening capital controls throughout the year, and each new restriction appears to push more capital toward alternative stores of value, bitcoin chief among them.
Global Tailwinds
Beyond China, other global developments are bolstering bitcoin demand. India dramatic demonetization move, which removed certain high-denomination notes from circulation, has driven interest in digital alternatives to cash. While the direct impact on bitcoin adoption in India remains nascent, the narrative of government currency instability has reinforced bitcoin store-of-value proposition.
In Europe, sociopolitical uncertainty, including banking sector concerns in Italy and ongoing refugee crisis debates, has contributed to a broader search for assets outside the traditional financial system. Bitcoin decentralized nature makes it an appealing hedge against institutional failure.
Bullish Consensus
Market sentiment indicators are flashing strongly bullish. Data from Whaleclub, a leveraged bitcoin trading platform, shows that the market has been 94% long on average during the week ending December 23. This follows a prior week that was 90% long, indicating sustained and even intensifying bullish conviction.
Petar Zivkovski, COO of Whaleclub, observed that traders have been keeping positions open for shorter periods on average, suggesting they are seeking quick profits in what they perceive as a strongly trending market. This behavior is consistent with momentum-driven rallies where participants expect continued upward movement.
Institutional Voices
Tim Enneking, chairman of cryptocurrency hedge fund EAM, has been among the more vocal bulls. Enneking argues that bitcoin has broken free of its two-year trading range and is poised to move significantly higher. His medium-term target of $1,200, which seemed aggressive when first proposed, is now being reconsidered as potentially conservative given the speed of the recent advance.
The broader narrative taking shape is that 2016 may be remembered as the year bitcoin transitioned from a niche experiment to a recognized component of the global financial landscape. With trading volumes exceeding $4 billion per day across exchanges during December, the liquidity and market depth have reached levels that make institutional participation increasingly feasible.
Why This Matters
The bitcoin rally of late 2016 represents more than just price appreciation. It reflects a fundamental shift in how people around the world think about money, borders, and financial sovereignty. When citizens in China, India, and Europe simultaneously turn to the same decentralized digital currency as a response to their local financial challenges, something genuinely new is happening. The $800 level is not just a number on a chart — it is a psychological threshold that, once broken, could open the door to a new era of mainstream bitcoin adoption and price discovery.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always do your own research before making investment decisions.
59k recovery is just short covering – need to see real buying volume
fed pause was fully priced in – the real question is what happens at the next fomc meeting
btc recovering above 59k on fed signals shows how correlated we still are to macro
rate pause is bullish for risk assets but crypto seems to be pricing in cuts already
every time powell speaks the market pumps then dumps – nothing new here