Crypto market momentum is still pushing ever higher as
Bitcoin touches its long term resistance point of $4,200. It appears that a
perfect storm is brewing for BTC which could send it on a rally up to $5,000 or
beyond. The next few days will be critical for crypto markets which will all
follow in its wake, whatever direction Bitcoin takes.
Four Months ago Bitcoin plunged through $6,000 which many
had predicted would be its floor in this bear market. It hit a 2018 low of just
below $3,200 in mid-December but has been battling back ever since. Higher lows
have been recorded over the past four months and since early February Bitcoin
has been in a clear uptrend.
Economist and crypto analyst Alex Krüger has posted a chart
of Bitcoin price since the November slump with the exclamation that BTC is ‘ready
to rumble’.
It is the fifth time Bitcoin has tested this resistance level and it is hovering just below it at $4,190 at the time of writing. BTC is up 1.6% on the day, 5.6% on the week, 8.6% on the month, and almost 12% since the beginning of the year. This is a clearly sustained trend that looks as though it will continue higher very soon.
Daily volume has also risen significantly since the
beginning of 2019 when it was just $4.6 billion. At the time of writing it has
just broke above $10 billion again which may well see bulls take prices above
$4,200 once again. The big question at the moment is can this level be
sustained or will Bitcoin instantly correct as it has done previously.
A Perfect Storm
Founding partner of industry investment company Tetras
Capital, Brendan Bernstein, recently likened the culmination of fundamentals as
the perfect storm for longer term Bitcoin performance. Economic woes and
quantitative easing has been a positive catalyst for decentralized digital
currencies for some time.
Political factors, especially in the US and UK, will also
weigh heavily on the minds of investors and these could also boost Bitcoin
prices. There are also pension woes as Anthony Pompliano pointed out with funds
not having the ability to pay their dues. Then there is the Bitcoin halving in
May next year which will reduce supply and block reward. Historically halving
events have been followed by a bull run and the timing of this next one at the
end of a long bear market could not be better.
Things are finally
looking up for Bitcoin, both in the short term and the longer run. A break
this week will result in instant optimism for crypto investors but the bigger
picture is even better.
