In the last 7 days bitcoin has experienced a huge 30% rally, reticent of the explosive days in 2017. According to eToro, bitcoin is currently trading above the $8,000 level with a high of $8,309, however with the leading cryptocurrency continuing to break daily highs, further growth is expected.
Throughout the year expert analysts have highlighted the $6,000 level as a major resistance point and posing as a significant blocker for bitcoin to get back to previous highs.
With the emphatic break we’ve seen, it is no wonder we are seeing the price trade above $8,000. This price level has not been approached since July last year and should the high of $8,474 be broken (which we are very close to at the time of writing this), the immediate target would fall back to the much talked about $10,000 level.
Traders will now be firmly placed on the bullish side of this market, looking for entries at short term support zones or simply breaks of highs. The decision for lots of new investors will be whether they should choose to buy through an exchange or a broker. For ease and speed, buying with a CFD provider like eToro is arguably the more favourable, especially with the increased liquidity a broker can provide. This essentially means you will get to buy at the price you intend to, and also makes selling considerably easier.
Why has bitcoin gone up?
It is still unclear as to the exact reasons for this bull run however there are a few coincidences that could have theorists licking their lips.
Bitcoin a safe haven?
Firstly, is bitcoin now a safe haven? With president Trump fuelling the US-China trade war and both countries breaking the truce, the stock market has seen its largest downturn so far this year. Notorious safe havens, Gold and the Japanese Yen, have both seen increases at the same time bitcoin has seen its rally. An obvious assumption could then be made that bitcoin is becoming a safe haven for investors.
Another interesting coincidence is that all this has happened whilst Binance trading was paused. Due to hackers stealing more than $40 million worth of bitcoin, the cryptocurrency exchange was forced to close its doors for a period of time, in which we saw a lot of the bitcoin rally. Binance CEO, Changpeng Zhao, suggested a roll back of the blockchain, an idea that was immediately shut down by the community. This highlighted the robustness of the cryptocurrency, which in turn may have given investors reason to buy bitcoin.
ICO & mainstream media
Other reasons for the rally could include the retreat of the ICO, which realistically isn’t going to be the catalyst because the ICO market has been retreating since the middle of 2018, and the continued reporting in the mainstream media.
The likes of Bloomberg are still reporting on bitcoin for the institutional investors that continue to trade it. The CME Group reported record volumes of trading on the 13th of May, which is likely to inspire confidence within the crypto market.
Can we expect further gains?
Despite not being able to pinpoint the exact reason for this bitcoin price increase, there are underlying factors that are improving confidence in the market.
From a technical standpoint the obvious new level of resistance to target is that $10,000 mark. Investors interested in entering should be looking at the best places to buy and more often than not that is when you see a pull back, any reductions in the price could offer an opportunity to buy. A notable level would be $7,500 but any shorter term pull back might suffice.
Can we expect altcoins to follow suit?
History has stated that when bitcoin goes, the rest follow, and that appears to be the case again this time around. Today Ripple followed suit with a 20% price increase, Ether has been more gradual, but it has also seen a significant increase.
Ripple is likely the one to keep an eye on as it reaches its highest levels of the year according to eToro, with key resistance broken at $0.376. The next target levels would be around the $0.45 and $0.56 handles respectively.
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