Bitcoin is on the verge of hitting $8,000 following the recent upswing of 20%. The cryptocurrency has been steadily building on the gains made in the last two months reaching a point of breaking the $7,500 point in the last weekend. It made a leap of 5% to around $7,700 as of Monday 23rd July according to Coin Market Cap following days of stability and improved price gains. The weekend saw the world’s leading cryptocurrency strike a two-month high as it continues to pull through its worst period at the start of the year.
It is important to note that Bitcoin’s recent gains are not reflected in all cryptocurrencies. For instance, Ethereum value went down by about 3 percent over the same period. For more information on real-time prices of different coins, check online cryptocurrency converter.
Although the Bitcoin rise falls short of some analysts’ predictions of rising above $10,000 in May 2018, the gains are seen as evidence of the coin’s consolidated growth in the coming months. The gains made in the last two months shows the BTC dominance in the entire crypto market reaching its highest level before the end of the year. However, the current surge is considerably low compared to the 2017 peak, when Bitcoin was headed beyond the $10,000 mark and almost created a stampede of investors clamoring to lay their hands on Bitcoin.
Bitcoin experts have linked the recent surge in price value to recent news about the giant asset-management group Blackrock planning to get into cryptocurrencies and blockchains. This probably acted as a catalyst for the soaring value of Bitcoin. Investors are also patiently waiting for the approval of a Bitcoin ETF requested by the blockchain platform SolidX through the Chicago Board of Exchange. Many are hopeful that the ETF (Bitcoin exchange-traded fund) will be launched as early as August by the US Securities and Exchange Commission (SEC).
Economists claim that if the ETF is introduced, Bitcoin’s price could shoot towards the highs of 2017 owing to increased regulation and trust in the cryptocurrency. A similar thing was introduced in the gold market in 2003 that precipitated a sharp increase in the price of the commodity by around 300 percent.
Nonetheless, the SEC has previously rejected the suggestion of an ETF last year, citing the unpredictability of price of Bitcoin. Regardless of how the SEC responds to the request, the trend that has captured the attention of governments and financial institutions to explore and work within the digital currency space is unlikely to be affected. In their report last week, Grayscale noted that institutions will continue to develop interests and venture into the cryptocurrency products amid the expectations surrounding the approval of ETF adding to the long-term gains of Bitcoins. According to a report by an eToro expert, there’s evidence that institutions and authorities are getting into grips with the crypto markets every month.
Bitcoin's One-Week Rally
Although the last two months have been particularly impressive in the gains by Bitcoin, the past week has been exceedingly important; the crowning moment. It was a case of solid upswing threatening to knock on the $8,000 barrier. Analysts at Newton Advisor refer the values around $8,000 as the "formidable area of resistance". The experts think that until that level is broken, it will be difficult to read into the trends and make projections if the virtual currency is truly heading towards meaningful highs of 2017. The current trend is seen as a “line in the sand” that the crypto-coin has to pass to start a larger rally as we head towards the last quarter of the year.
Bitcoin is still struggling at more than 60 percent low of its all-time high of close to $20 000 in December last year. Just like Bitcoin, other cryptocurrencies have come under global scrutiny following cases of fraud and theft around initial coin offerings, market manipulation, and the alleged use of cryptocurrencies as a hub for money laundering.
Weekend Price Swings
According to a recent study by CoinMarketCap, based on historical data, weekends are emerging as crucial times for price swings in the crypto market. This is not too far from the truth considering the last two months where Bitcoin has seen critical gains in its value on weekends. Especially the Saturday of 21st July to Monday saw the major cryptocurrency going up almost 18 percent. Even by looking at historical data the biggest price changes have materialized over the weekends.
On a Saturday of December 2017 was the day that the virtual currency peaked at its all-time high of $19 600. Over the last two months, the lowest value of $6 648 was experienced over the weekend of June 9. Nearly 82% of the weekends have seen at least 3% moves in one or the other direction in Bitcoin prices. Around 60% of the weekends have had a 5% or higher price move over a weekend since December of last year.
Mark Newton confirms the observations when he states that "We are seeing above-average volatility on weekends with it moving dramatically up or down." The most recent was the instance when the Bitcoin value dropped to the lowest of $6 647.33 over the last two months during the weekend of June 9.
The report also noted that although the price changes are considerable, trade volume is lower on weekends. This means that the size of individual orders is usually big while the number of orders is still low. This could indicate that large holders of the cryptocurrency (Bitcoin whales) are mainly active during the weekend to stockpile or offload big chunks of the Bitcoins so as to take advantage of the big price swings that happen in the weekends. Such activities by the big holders have a significant impact on the price changes of cryptocurrencies. This trend was very influential over the last two months contributing to the gains made by Bitcoin.
However, this doesn’t imply that weekends are the only times to expect a volatile behavior in cryptocurrency trading. You can still make a good trade on any day of the week!
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