By CCN: The bitcoin price could surge to $6,500 soon because it breached a key resistance level of $5,500 this week. That’s the assessment of Naeem Aslam, the Chief Market Analyst at ThinkMarkets, a forex and derivatives broker.
Indeed, bitcoin has roared to a six-month high this week after flailing for much of 2018.
Analyst Naeem Aslam told CCN that there are several factors driving the rally, including optimism that Nasdaq is growing more confident about bitcoin futures.
Moreover, he says there’s a bullish trend forming with speculative bitcoin shorts that’s pushing the price higher.
“Technicals are fully supportive and the bulls are pushing the markets higher based on that. It’s likely that bitcoin’s price may move towards $6,000 or even touch $6,500.”
“We have Nasdaq, which is about to get serious about Bitcoin futures. Not to mention the speculative short positions, which are going to get squeezed out very soon (as per the CFTC data).”
Aslam also pointed to the conditions surrounding bitcoin’s past rebounds as evidence that another rally is in the making. He says the current patterns are similar to those that occurred before previous rallies, when the bitcoin price rocketed to record highs.
As CCN reported, Aslam noted that bitcoin crossed its 200-week moving average in March. That’s a significant technical indicator.
In short, Aslam says technical analysis is building a bull case for bitcoin after it got pummeled during the prolonged bear market of 2018.
Based on a mathematical calculation involving approximate percentage projection of bitcoin’s price that occurred during the last bull run, Aslam says it’s not unrealistic for bitcoin to rocket past $100,000.
“Back in 2011, the price plunged nearly 93% and in 2014, it dropped 84%. As for the most recent price crash, we have experienced the smallest price crash — 79% from its recent high. The most important part is that the price has started to rally back up.”
“This argument becomes even more clear when we look at the bottom panel of this chart. The drawdown percentage curve is much higher now (shown in green circle) as compared to what happened back in 2011 (shown in red circle).”
Not everyone is convinced that the brutal Crypto Winter is behind us. As CCN reported, investment manager Peter Mallouk — a certified financial planner — says crypto bulls are deluding themselves if they think the current rally will last.
Mallouk, the president of Kansas investment firm Creative Planning, says the recent price spike is merely a temporary recovery before bitcoin totally collapses. Why? Because it’s worthless and has no value.
“We’re going to see cryptocurrencies collapse,” Mallouk said in early-April.
Mallouk’s skepticism is not new. In December 2018, Mallouk mocked bitcoin as a “dead man walking,” and predicted that the bitcoin price will drop to zero.
“It won’t go quietly, but the recent precipitous drop may be the beginning of its inevitable and inexorable death spiral. The end may not be pretty when it comes.”
On a separate note, bitcoin is the reigning champ among crypto criminals. According to blockchain analysis firm Chainalysis, bitcoin is used in 95% of cryptocurrency crimes.
**Update** May 2019: Investment adviser warns that the BTC rally was a dead cat bounce.
Last modified (UTC): May 31, 2019 22:14