Many people who believed in Bitcoin’s power have lost faith, and this is for a very good reason.
The currency reached $20,000 in December 2017. It has remained between $6000 and $10,000 since the start of the year. Over the past month, it has dropped between $5700 to $7000.
Over the past few days, however, there has been a bit of momentum in Bitcoin’s price. One Bitcoin was worth approximately $7300 a week ago. Bitcoin’s value today is almost $8,200. This is an increase of over 10 percent.
Some voices in the crypto community have declared that this latest rally is signalling Bitcoin’s big comeback. Could they be correct?
Brian Kelly, Trader, Says the Rally Is “For Real”
Trader Brian Kelly stated that he believes the rally is being driven by speculation about Bitcoin ETFs on CNBC. He doesn’t think that the SEC will allow Bitcoin ETFs forward, which could impact the price of Bitcoin over the long-term.
Kelly believes institutions are becoming more serious, which is a positive sign.
“I’m getting calls from people who didn’t like the price [of Bitcoin] December who are coming back now and saying ‘look, this thing is not going away, we need to understand this asset class and how it’s going to fit into our portfolio.'” He also noted that Coinbase might have secured a $20 million hedge fund for its custody service last week.
These sentiments are similar to those of Mike Novogratz (Bitcoin bull) who stated last week in a keynote speech that “herds” of institutional investors were heading straight for the crypto market.
Kelly explained that there is a new interest in Web 3.0, also known by the Internet of Value, which is driving interest in cryptocurrency and blockchain. He said, “We are moving from a database into a data-bank.”
Do not hold your breath
Academy Securities Head of Macro Strategies Peter Tchir is less optimistic. However, he wrote in Forbes that despite citing similar indicators, his view that Bitcoin is heading back to $5,000 was shaken.
Tchir believes it is important to spend more time researching Bitcoin’s price and taking into account any factors that could be causing it to fall.
CoinDesk reported that a key price indicator indicates that the rally may be “overstretched”.
Omkar Godbole, the report’s author, stated that “Notably, relative strength index (RSI), which is one of the most commonly used momentum indicators, jumped over 70.00 (overbought area) earlier today and is currently at 74.56 – its highest level since December.”
“So, it can be said that bitcoin has reached its highest overbought level within seven months.” That’s definitely possible.