Bitcoin’s price fluctuation is at it again. After a month long decline, Bitcoin’s price is climbing again. The recurring question is why and is it real growth or just anoter price bounce. There are a lot of positive signs helping prices move up. These signs indicate that a strong push upwards is in the making. Among them are short term flipping opportunities, a rising bullish sentiment, and Bitcoin’s global reach.
The first answer to why the market is recovering is simple, Bitcoin was oversold. Everytime the market drops, it creates an opportunity to buy crypto currencies at a discount and a lot of buyers take advantage of it. Therefore, a rise in price simply means that demand (buy orders) are being filled. Investors buy low, ride the wave up, and cash out as soon as the market doubles. This is seen time and time again that it’s almost predictable.
Change of Hearts
Bitcoin’s speculative nature depends a lot on people’s mood. Today, the governments of Japan and Malta announced the passing favorable legislation towards Cryptocurrencies. This is a game changer for the industry. In September 2017 Japan constituted 50% of the Bitcoin market; by November the same year it was 60%. Therefore, whatever happens in Japan affect the entire market.
In addition, after the announcement of the SEC establishing that Ethereum is not a security, the idea of crypto Exchange Traded Funds began to float in earnest. This is a monumental step not only towards legitimacy and adoption, but also for institutional investment.
And lastly, Ethos announced that it’s nearing completion of its main net and this drove its market price up 90% in two hours. This undoubtedly added to the buy craze that is driving the market up.
Bitcoin Never Sleeps
Bitcoin is traded globally 24 hours a day. So, when the market changes, it does so in a grand scale; It’s not a localized event. It also has a larger audience than any other market. Bitcoin’s prices are watched careful not only by Western financial analysts, but the public in general from all countries. Anyone with disposable cash can at anytime create a buy order and drive up demand.
So to answer how high prices will go and for how long, we must not forget the white elephant in the room: Wall Street. Institutional investors are clutching their chairs, watching, and biding their time, waiting for the opportune moment to buy. And experience will show that the best time to buy is when prices are low. Therefore, if conspiracy theories have any merit, well placed manipulators will drive prices down as much as possible before entering the market. This means that current prices cannot go excessively high as this would prolong Wall street’s anxious wait.
A good demarcation line will be the $7,500 mark. This will be the next resistance line that Bitcoin must pass in order for this move to be considered stable. If it fails to break that mark, Bitcoin will most likely tumble down again, quite possibly below $5,000 or even low $4,000. This also indicates the time it will spend rising. If it goes above the $7,500 mark, it is quite certain that we will see Bitcoin steadily climb for a month or two as it did last April. If it doesn’t, this will again be another quick burst of greed resulting in short term flip and profits.