Bitcoin Price Party’s Only Getting Started after 2019’s Monster 100% Surge
Bitcoin price has doubled in 2019 but the rally is only getting started. | Source: Shutterstock
By CCN.com: According to eToro senior market analyst Mati Greenspan, bitcoin is in amidst a parabolic bull cycle and is on track to sustain its strong momentum over the medium to long term.
Since January, within less than six months, the bitcoin price has increased by nearly 100 percent against the U.S. dollar.
Still, despite its large short-term rally, Greenspan noted that the dominant cryptocurrency is only at the start of a bigger cycle that may lead to new highs for the asset.
Why Industry Executives are So Optimistic in Bitcoin
In December 2018, the bitcoin price dropped to its lowest yearly point at $3,150. At the time, even though the industry had demonstrated significant progress in improving the infrastructure supporting the asset class, the sentiment around the market was quite gloomy.
From January to late March, the bitcoin price showed little volatility in a tight range between $3,000 to $4,000, leading traders to become concerned about the possibility of the asset plunging by another 50 percent following an extended period of stability.
In the fourth quarter of 2018, when the bitcoin price remained stable for more than 3 months at the mid-$6,000 level, it fell by nearly half to $3,150.
However, bitcoin showed a strong recovery backed by large volume on regulated platforms like the CME bitcoin futures market and Grayscale’s Bitcoin Investment Trust (GBTC), leading the crypto market to rebound in a short time frame.
Greenspan said :
We’re just part of a larger cycle. Bitcoin has gone through several cycles before these massive bull runs, we’re talking about 10,000 to 50,000 percent gains within a short period of time and then it has these massive retracements. They can be 80 percent or even 90 percent and that’s what he had coming off of $20,000 per bitcoin all the way down to just above $3,000 per coin.
The speculation in the market at the moment is that we’re just getting started on the next parabolic cycle.
The crypto market moves largely by cycles. As former Coinbase CTO Balaji Srinivasan suggested, the market often moves by the pattern of crash-build-recover-rally and has done so four times in the past ten years.
Every rally subsequent to a large crash or a brutal correction typically takes the bitcoin price to a new all-time high because companies and developers in the industry build to strengthen the infrastructure supporting the asset class.
Industry executives like Silbert remain optimistic in the near to medium term outlook of the crypto market due to the noticeable improvements in various areas including custody, transparency, security, and compliance.
Barry Silbert, the founder and CEO of Digital Currency Group, a leading crypto-focused venture capital firm, noted:
Sentiment, the technicals look great. An 80 percent drawdown happened three or four times and every time that’s happened [it hit] record highs. So as soon as you get the price going back up, and animal instincts come back [market recovers].
But the difference between this increase in price versus the bubble in 2017 is the infrastructure is much different. You have custodians now. you have trading software, you have compliance software, people are educated about the asset class, so this time is different.
Can the Market go Even Further?
Triggered by a 5,000 BTC sell order on Bitstamp, which is equivalent to around $35 million, many contracts on a major margin trading platform BitMEX were liquidated on May 17. Consequently, the bitcoin price briefly plunged to $6,400.
Considering that investors generally expected a correction to hit the market following a 45 percent increase in price in a single month, strategists have suggested that the market is likely to absorb the sell-off and rebound.
Click here for a real-time bitcoin price chart.
