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Bitcoin is dragging the wider crypto market with its rally as it hits new 2019 highs. | Source: Shutterstock

By CCN Markets: In the past two days, the valuation of the crypto market has increased from $300 billion to $325 billion, supplemented by the strong upside movement of bitcoin.

The bitcoin price is up from $8,900 to $11,000 in the past seven days against the U.S. dollar
The bitcoin price is up from $8,900 to $11,000 in the past seven days against the U.S. dollar (source: coinmarketcap.com)

As the bitcoin price quickly moved from $8,000 to $11,000, major crypto assets in the likes of Ethereum, XRP, Bitcoin Cash, EOS, and Binance Coin recorded fairly large gains against the U.S. dollar.

Little resistance, investors see momentum of crypto sustaining

The bitcoin price has increased by nearly 190 percent year-to-date after dipping to around $3,150 in December 2018.

The momentum of the crypto market has primarily been driven by bitcoin in recent weeks and technical analysts generally foresee the market sustaining its current upward trend if bitcoin moves past the $12,000 mark.

According to Mohit Sorout, a general partner at Bitazu Capital, there exists little resistance between $12,000 to $20,000 for bitcoin, indicating that the dominant crypto asset could quickly move towards its all-time high in the near term.

“There is no real resistance between $12,000 and $20,000. Once $12,000 breaks, instantly shift base to mountains, stop selling your BTC for petty bills. But beware of wild animals there – they’re waiting for your precious BTC. Learn close combat, you’ll need it,” he said.

Peter Brandt, a highly regarded trader, similarly suggested that the lack of resistance above key levels and the tendency of bitcoin to undergo parabolic movements may lead the asset to peak at $100,000.

He noted:

Bitcoin takes aim at $100,000 target. BTCUSD is experiencing its fourth parabolic phase dating back to 2010. No other market in my 45 years of trading has gone parabolic on a log chart in this manner. Bitcoin is a market like no other.

Investors anticipate that the opening of the CME bitcoin futures market on Monday could act as a near term catalyst of the market.

As said by JPMorgan head of global market strategy Nikolaos Panigirtzoglou, the bitcoin futures market account for a relatively large portion of the global volume and its impact on the asset has been understated.

“The importance of the listed futures market has been significantly understated. The report by Bitwise credits the traded futures as an important development in allowing short exposures that enabled arbitrageurs in properly engaging in arbitrage, and that the futures share of spot Bitcoin volumes increased sharply in April/May,” Panigirtzoglou said.

Some anticipate that stacking short contracts on margin trading platforms and futures markets would get liquidated in the upcoming days as the market continues its upside movement, further fueling the rally.

As a safe haven asset

Currently, the majority of investors in the crypto market are said to have invested in major assets like bitcoin for the potential return benefit of the asset relative to its risk.

Many investors in the broader financial market still do not see bitcoin as a safe haven asset to hedge against global instability, possibly due to its small market cap when compared with traditional assets like gold.

However, Morgan Creek Capital Management founder and CEO Mark Yusko said that the addition of bitcoin to his portfolio has decreased its overall risk, indicating the possibility of bitcoin potentially being considered as a major asset in the long term.

“Since I added bitcoin exposure to my portfolio: Overall risk of portfolio is lower (correlation benefit) Overall portfolio value is higher (return benefit) Portfolio illiquidity has dropped as swapped out a little private asset exposure (liquidity benefit),” said Yusko.

Watch CCN’s Take on Bitcoin Price:

This article was edited by Samburaj Das.