HomeContributorsFundamental AnalysisBitcoin Price Soars To $47,400 After Large Tesla Purchase

Bitcoin Price Soars To $47,400 After Large Tesla Purchase

The price of cryptocurrencies rallied overnight after Tesla revealed that it had acquired Bitcoin worth $1.5 billion. The company also revealed that it will start accepting Bitcoin in its stores and websites. This makes Tesla the most high profile company to own Bitcoin, with other holders being Square and MicroStrategy. As a result, investors believe that more companies will start shifting some of their funds into Bitcoin. The BTC price soared to $47,400 while ETH and Dogecoin rose to $1,750 and $0.085, respectively.

US equities rallied overnight, helped by a relatively weak US dollar and hopes of a new stimulus deal by the Biden administration. The recent weak jobs numbers by the Bureau of Labor Statistics have given legislators an incentive to provide more stimulus. In a statement on Sunday, Janet Yellen, the Treasury Secretary said that the country will likely get to full employment in 2022 if Congress provides this stimulus. The Dow Jones rose by 130 points while the S&P 500 rose by 16 points.

The Japanese yen gained against the dollar as traders reacted to the country’s income data. According to Japan’s Ministry of Finance, the overall wage income of employees declined by 3.2% in December as the country continued to deal with the virus. Overtime pay declined by 8.9% while average cash earnings fell by 3.2%. These numbers are important because they provide insights into the strength of the economy and the labour market.

Later today, the German Statistics Bureau will publish the country’s trade numbers for December. Analysts expect exports and imports fell by more than 1% because of the supply disruptions caused by the pandemic. Later, the Energy Information Administration (EIA) will release the short term outlook while the United States Department of Agriculture (USDA) will deliver the WASDE report.

EUR/USD

The EUR/USD continued the rally started on Friday after the weak jobs numbers. It rose to a high of 1.2080, which is higher than the Friday low of 1.1950. The price is along the upper side of the Bollinger Bands while the 28-day and 15-day EMAs have made a bullish crossover. Still, the price is below the descending trendline. As such, the downward trend is likely to remain so long as the price is below this line.

GBP/USD

After weeks of trying, the GBP/USD finally managed to break-out above the resistance at 1.3758 in the overnight session. On the daily chart, the price has formed an ascending channel whose upper side is above 1.3800. Also, the price is above the Variable index dynamic average and the short moving averages. Therefore, the pair will likely continue rising as bulls target the upper side of the channel at 1.3800.

USD/JPY

The USD/JPY dropped before and after Japanese economic data. On the four-hour chart, the two moving averages have made a bearish crossover while the Relative Strength Index has continued to move lower. The pair will therefore continue falling as bears target the next support at 104.50.

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