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.