Bitcoin has climbed from close to $9,000 a week ago to nearly $11,000 today. (Photo by Chesnot/Getty ... [+]
Getty ImagesBitcoin prices have experienced some notable gains lately, breaking through $10,000 yesterday and then continuing to rally.
As a result of this bullish movement, bitcoin reached $10,947.76 this afternoon, CoinDesk data shows.
At this point, the world’s most prominent digital currency was trading at its loftiest value since August, additional CoinDesk figures reveal.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
When asked to explain the cryptocurrency’s latest upside, Tim Enneking, managing director of Digital Capital Management, pointed to several factors.
“The U.S. equities/BTC correlation has been absurdly high for several months and BTC literally could not break through 10k and continue to move up without that correlation falling well below +1. That has now happened, along with a monumental psychological barrier (10k) falling.”
“With the move in the alts causing BTC correlation to plunge to almost 60%, there is also a ‘standard’ rotation from alts into BTC which is just getting started,” he noted.
“Add to that the dollar at record lows and gold at record highs, and BTC has a *lot* of healthy tailwinds right now.”
While this may not be a “perfect storm” it isn’t far off, said Enneking.
Once these variables combined to fuel the latest rally, a “short squeeze on Sunday sent Bitcoin through the key $10,000 level,” stated Denis Vinokourov, head of research for London-based digital asset firm Bequant.
While Enneking and Vinokourov highlighted the aforementioned variables, analyst Marouane Garçon spoke to the growing optimism he sees in the space.
“Open interest in Bitcoin has been declining for quite some time, but the amount of traders going long has been increasing significantly,” said Garçon, managing director of crypto-to-crypto derivatives platform Amulet.
“This usually is a signal for market makers to push the price down and trap those going long,” he stated. “In this case, the opposite has happened.”
Mark Warner, head of trading for London-based financial services firm BCB Group, also weighed in on the latest market developments.
“The price increase ends a long consolidation period, characterized by decreasing volatility,” he stated.
“Historically speaking, these low volatility periods have often ended with violent price action which often trap traders on the wrong side of the move, their liquidations adding to the momentum.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.
The Link LonkJuly 28, 2020 at 01:39AM
https://www.forbes.com/sites/cbovaird/2020/07/27/bitcoin-surges-to-fresh-2020-high/
Bitcoin Surges To Fresh 2020 High - Forbes
https://news.google.com/search?q=fresh&hl=en-US&gl=US&ceid=US:en
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