Bulls finally got the better of stubborn bears as they smashed the $4,200 resistance level to see a sharp 20% Bitcoin price increase. The surge occurred at 07:00 UTC+1 on April 2 and managed to reach $5,000, marking the flagship cryptocurrency’s highest level in 2019.
Today’s closing price will be a key indicator for where things move from here. Should Bitcoin close above the 200-day moving average, which seems likely given that the price increase has held steady above $4,700, this brings the opportunity of a golden cross pattern.
Investors will look for the golden cross to signal another major bull run, and the next target could be $6,000. But with markets as unpredictable as these, Bitcoin may yet see a bottom around the low $3,000s; failure to keep momentum could lead to another plunge.
Bitcoin was widely seen to be approaching a “pump or perish’” moment. But, for the prominent investor and founder of Digital Currency Group, Barry Silbert, its performance against the dollar in the first quarter of 2019 was not to be forgotten.
His point is an interesting one; in part due to the high volatility and extreme cycles that Bitcoin has seen – especially true since the astronomical high of December 2017, which preceded a bleak year for cryptocurrencies – it is rarely seen as more than anomalous in reference to USD.
Could this be a sign that experts such as Silbert see increasing promise and maturity in Bitcoin? An indicator may be that we are starting to approach a more accurate price level for the world’s largest cryptocurrency, but little more than that for now.
The proof will end up being self-evident, though signs show a more stable Bitcoin than has been the case previously. Gradual gains made throughout February did a great deal to instill confidence in markets.
As a store of value, Bitcoin is, in theory, more fit for purpose than gold. The coin has built-in scarcity, but the ease of transfer and proof of ownership are even more compelling advantages. For now, this is the clearest use case of Bitcoin and could help to direct future price movements.
Stability will first need proving across a longer timescale, as that is a key function of gold; you always know that it will be worth something, somewhere to someone. Bitcoin may have a long way to go before this point.
We should be a long way past notions of FOMO and FUD which have instructed some of the most novice investors to help keep crypto markets volatile for so long. There remains the possibility that Bitcoin will find lows around $3,000 and who knows, it could drop even lower.
Performance for Bitcoin has been bright so far in 2019, and there seems a solid chance of another $1,000 increase. This does not mean those hopeful investors should be surprised if bears take control once again. We might simply be bearing witness currently to a short squeeze. At any rate, this recent price rise has caught the attention of the Bitcoin industry.
Last modified: June 25, 2020 4:10 PM UTC