The bitcoin price has peaked at $13,000 on the day following a staggering 11 percent gain against the U.S. dollar.
Three months ago, the bitcoin price was hovering at around $4,000 and within a three month span, the asset has grown by more than three-fold.
Investors expect bitcoin momentum to continue
Based on technical indicators and data, analysts generally expect the momentum of bitcoin to be sustained in the near term.
Although some have suggested the possibility of a sharp pullback, cryptocurrency technical analyst Josh Rager said that the momentum of the dominant crypto asset remains strong and if it passes the $14,200 mark, the road to its record high at $20,000 is clear.
Weekly chart looks so good People can talk pullback all they want, but not much is stopping Bitcoin from ripping up to $13k+ After price passes $14,200 there isn’t a lot standing in the way to new all-time highs I’m not going to try to stand in front of a moving train
Similarly, Adaptive Fund Head of Research David Puell stated that if bitcoin moves past $14,000, all bets are off and the asset could aim for an all-time high in the short term.
“About to battle magnificents foes, the monthly and quarterly resistances at $13,800-$13,900. Fight might be bloody and tiresome, but once we claim victory, lads, by all means, all bets are off,” he said.
Fundamentally, the hash rate of the Bitcoin blockchain network is at an all-time high, the developer activity of its open source protocol is on the rise, and the inflow of capital from institutional investors has been consistently increasing in the past year and a half, all of which point toward an optimistic trend.
As said by Yingfeng Shao, an OTC cryptocurrency trader in an interview with CoinDesk, traders believe that the current rally of crypto assets is being primarily triggered by investors within the market and not by new investors.
“The question is where is the money coming from and I think my take on it is that until you can prove to me that new retail money or new institutional money, this sort of large pool of funds, that is just sloshing around inside the space [then people who already put some money into the space are behind the rally],” Shao noted.
Google Trends indicates that the mainstream interest in bitcoin and the rest of the crypto market is nowhere close to 2017 bull market levels, which have gotten analysts to foresee the strong possibility of a larger rally hitting the crypto market in the near to medium term.
Considering the fundamental factors supporting bitcoin including the imminent block reward halving of the asset and the strong momentum of the asset as portrayed by technical indicators, investors anticipate the asset to sustain its current trend.
Was it a local top?
Alex Krüger, a global markets analyst, explained that the significant surge in the volume of BitMEX as the bitcoin price hit $12,971 may indicate the formation of a local top, leading the market to stabilize or consolidate for a short time frame.
“The hourly bar that marked tonight’s bitcoin $12,972 top had the highest hourly volume in Bitmex’s history. When such high volume prints come after an extended run, they often mark a local top. One could appreciate an intraday blow-off top on the 5 minute as well,” he said.
But, the crypto exchange market and the CME futures market have seen a substantial increase in daily volume in the past week, which could potentially act as a catalyst for an extended upside movement.
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