Last Wednesday, it was reported that Bitcoin was trading under $6000. In just one week, it has increased to more than $8000. It continues its record run after climbing 16% overnight. This coin is now unstoppable. It is experiencing a bull run. Just a week ago, it was trading for about $5700 and about two months ago, it was trading at $3800. It may sound crazy but as we know and would have experienced, the unpredictability factor is high in crypto. To be precise, Bitcoin reached this new high on 13 May.
Currently, bitcoin is trading for above $8000. The next major resistance level is estimated at $8200- $8300. Furthermore, the resistance level is estimated to be $8500, $8800, and $9000. $8000 is now the closest support level for Bitcoin. Any asset, the prices of which surge at a rapid pace, has the need to slow down and correct itself. If no correction is done for a long time, then it would need a deeper correction in the future.
Bitcoin reached high levels in late 2017 and early 2018. On Saturday last week, the price of Ether, the currency of the Ethereum network, rose above $200. Other cryptocurrencies such as Monero, Dash, Bitcoin Cash, and Litecoin are also expected to rise. In recent weeks, Bitcoin has outpaced all the alternative cryptocurrencies. The price of Bitcoin has doubled since late March.
Apart from the Bitcoin, another piece of bullish news has recently come from Bakkt, a digital asset exchange, which shares a parent company with the New York Stock Exchange. It plans to begin user acceptance testing for Bitcoin futures contracts. There are also trends which show that there would be an increase in Bitcoin purchases by large institutional investors. This may be the main reason contributing to the rise in Bitcoin prices, though the reason for everyone’s sudden interest in Bitcoin remains unknown.
This meteoric rise of Bitcoin resembles the rocketing growth it showed in the latter half of 2017. The geopolitical tension such as the trade war which is happening now between the U.S. and China may also be a factor contributing to the surge in the price of Bitcoin.
“Anticipation of the upcoming supply shock [of new BTC introduced via mining] may be creating upward pressure on the price of Bitcoin.” These were the words used in an email written by Alyssa Killeen, a partner at Stillmark, an investment and advisory firm.
Killeen also noted that the value of Bitcoin has increased greatly today when compared to what it was last year. Americans will be able to easily access bitcoins through apps like Cash, Robinhood, eTrade, and TD Ameritrade’s BTC contracts. Killeen also wrote that technological advancements are now making Bitcoin more and more useful and secure.
The impressive cryptocurrency rally began in early April when Bitcoin rose to more than 20% over 24 hours. Jeff Dorman, the chief investment officer of asset manager Arca stated: “Buyers outweighed sellers, and market makers felt the imbalance pressure so they took their markets higher.”