This year has been dreadful for cryptocurrency traders, who watched as Bitcoin plummeted from almost $20,000 in December 2017 to reach a low of about $5,800.
The world’s largest cryptocurrency surged as high as $8,342.62, and rose more than 7 percent in the last 24 hours, according to industry website CoinDesk, which tracks a number of exchanges. The last time bitcoin traded above that key level was May 23.
This is prompted by recent reports about impending approval in the United States for a ‘cryptocurrency exchange-traded fund’ which will make it much easier for people to invest in virtual markets.
Mark Newton, advisor and founder at Newton Advisor said,
“Given that it has trended down so sharply since May, I wouldn’t want to get too greedy,”.
“Looking at cycles near term, this doesn’t mean it will go back to its highs right away.”
Matthew Newton, analyst at eToro, a global investment platform, said ‘bulls’ are back in the market. A bull is someone who buys stocks in the hope of selling them for a profit at a later date. He said,
‘”The bulls seem to be maintaining the upper hand, after a significant shift in the price pattern last week.”
On the other hand analysts at Fundstrat are observing the 15-day daily moving average, often a proxy for longer-term trends, which has been trending positively for bitcoin.
However the analysts agreed that some short-term indicators are overbought, which often signals a price pullback. Still, the firm expects any drop to be “relatively shallow”, according to technical strategist Rob Sluymer. Slyumer said,
“Incrementally, it’s positive action as the May-July downtrend has been reversed,”
However, the firm is hanging on to its $25,000 year-end price target. Fundstrat Managing Director and Head of Research Tom Lee said this week’s 20 percent jump signals a return of bullish sentiment.
Lee, who was formerly JPMorgan Chase’s chief U.S. equity strategist said,
“A month ago, bitcoin was seen as broken, about to be regulated out of existence, and bubble with downside of $3,000. The trajectory of the Bitcoin’s narrative has inflected.”
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