The abrupt increase in the bitcoin price was supported by a noticeable increase in daily bitcoin spot volume estimated to be around $570 million as of May 7 by OnChainFX. In comparison, the daily bitcoin spot volume in early March was $270 million.
Although industry executives and prominent researchers in the likes of Ethereum co-creator Joseph Lubin and cryptocurrency analyst Willy Woo believe the bottom is in for bitcoin, some traders see the dominant cryptocurrency retracing in the near-term.
In December 2018, Ethereum co-creator and ConsenSys founder Joseph Lubin called for a bottom in the cryptocurrency market, citing the presence of a disproportionate amount of fear, uncertainty, and doubt in the market.
Lubin said at the time:
I am calling the cryptobottom of 2018. This bottom is marked by an epic amount of fear, uncertainty, and doubt from our friends in the 4th and crypto-5th estates.
What I’ve witnessed among the chattering class the past few weeks in response to ConsenSys 2.0 is a rather typical tune: the alarmed, the eulogistic, and the gleeful.
Since then, the bitcoin price has recovered from $3,179 to $5,880 by nearly 85 percent against the U.S. dollar in the regulated bitcoin exchange market of the U.S.
Although bitcoin has shown strong momentum in recent months and has recorded a staggering 85 percent increase in price in less than six months, some traders remain cautious about the near-term trend of the dominant cryptocurrency.
Josh Rager, a cryptocurrency trader, said that he expects bitcoin to retrace to $4,100, testing a major support level which required more than three months for the asset to break out of.
“On high time-frame, looks like Bitcoin is heading to at least $6,130 and hard to convince me otherwise From there, a pullback to $4,100 would set up some nice opportunities,” Rager said.
Woo, who said that he is 95 percent certain that the bottom for bitcoin has been established at $3,150 in December of last year, said that he anticipates bitcoin to retest support levels in the next month or so.
But, Woo noted that as long as bitcoin remains above $4,400, in four to eight weeks, the asset could see a confirmation of a proper bull run.
“The bull market (upward and onwards) has not formally confirmed just yet. We need to successfully retest the 200 day MA & Realised Cap (both ~$4400 right now), or without retest we need to stay above them for a sizeable time, say another month,” he said.
According to Binance Research, bitcoin has outperformed the best performing asset classes in the U.S. market such as crude oil and tech stocks in 2019, recording a year-to-date (YTD) price increase of 53 percent.
Other major crypto assets like Ethereum (ether), litecoin (LTC), and Binance Coin (BNB) recorded a 32.4 percent, 153 percent, and 270 percent gain YTD respectively, rebounding strongly since December.
There exists a chance that bitcoin and the rest of the cryptocurrency market do not test key support levels, remain stable, and continue to climb up in the months to come, as suggested by one trader.
In most instances, however, a strong upside movement of bitcoin has often been followed up with a consolidation period of a slight retracement.
In consideration of the intensity of the upside price movements of major crypto assets in recent weeks, some traders are anticipating the market to retrace before initiating large movements.