Bitcoin Breaks Through $9k Resistance Level
Year-to-date gains currently amount to approximately 150%, and the current price of $9,260 represents a 13-month high for the world’s largest cryptocurrency.
The main thing we should be asking is “what is causing so many people to buy Bitcoin?” There are several factors that may explain the price spike, and it helps to understand them.
The first big factor is the surfacing of rumors around Facebook’s GlobalCoin. It both adds legitimacy and creates a strong news cycle around cryptocurrencies, so it is natural that more people would get into this. Additionally, this coin is going to make it even easier for investors to buy into the coin, which adds speculative value to those trading BTC right now.
Another big factor is the uncertainty in the economy as a result of the impending trade war. Investors are naturally thinking about moving their money into sectors that would benefit from this increase in volatility and perform well in a crashing economy.
Institutional Interest Sustaining Momentum
An interesting trend that has been observed is that the number of Google searches for Bitcoin has actually been going down, even as the price goes up. This suggests that institutions are doing a lot of the buying, as opposed to retail investors.
This is still a theory, but it would explain the buying power and how it has been possible to boost Bitcoin to new heights. Many big companies have announced trading desks, blockchain initiatives, or collaborations that utilize the technology, and it wouldn’t be so hard to believe that they do a bit of speculating themselves.
Where the Sentiment Leads
And if this newfound institutional support is correct, it means that this year could have an even higher high. The last time, it was almost entirely supported by retail investors, so the joining of this new money could make all the difference in where the price goes.
Charting tools are showing a long-term trend towards values as high as $60k. This is a very nebulous way of predicting the price movements, but it does help us understand the psychology of investors and what they may be feeling right now.
The next major resistance levels are around $9,500 and $11,500, so we will see how Bitcoin fares in the coming weeks. However, it seems like the bulls are in control of the coin right now based on the above factors. If there are continued money flows into the coin, then we could at least see repeats of the 2017 rally that launched Bitcoin into the mainstream. Except this time, there will be institutional support, and who knows where that could take it.