Following last week’s big uptick, mostly likely triggered by the relief that Bitcoin’s network split didn’t have any effect on its price, Bitcoin pulled off yet another incredible feat – going well over $4,000 during the weekend. However, as it has happened many times before, the price rolled back quickly after the peak to currently come close to $4,100, while market signals are showing there might be further rollbacks.
Like with previous upticks, one of the key news this week was focusing on how risky an investment idea Bitcoin is. According to Adam Harting from Forbes, being an asset of stored value and not a real currency essential to the functioning of society, Bitcoin can be risky as there’s always the chance that stored value will change, since it mostly depends on people’s own perceptions.
Drawing on the famous tulips mania from the 1630s, which first boosted the value of some rare breeds of tulips to incredible heights before crashing fast, Harting believes the same could happen to Bitcoin any moment due to the lack of control and the possibility or price manipulations or hacks. Yet, thus far Bitcoin has continued stepping over such warnings with ease, even though there were many to be heard.
High Volume and Bearish Pressure
During the past week, the price of Bitcoin went through some major fluctuations that began on Saturday, when it first neared $3,900, and culminated on Tuesday, when it hit $4,408.35. But as of now, the price is near $4,100.
Judging from the volume changes, it seems like the price was pushed by either deliberate buying pressure or very strong enthusiasm, as each uptick coincided with large volume increases. The evident trading interest hasn’t decreased even now, when the volume sits at $2.5 billion, while the market cap is at $68 billion.
Our technical analysis shows a path that’s difficult to predict, with signals changing fast and small bursts of volatility appearing on the charts. Our 1-hour time charts show the situation is neutral, with 8 out of 12 moving averages and 3 out of 12 oscillators being pro-buy.
The SMA 100 is way above SMA 200 on this time frame, showing an upward path is more likely, although the bearish pressure and high volume signal this is not a clear projection. Per the current trends, Bitcoin is likely to continue climbing, unless bears don’t take over again, in which case you can expect a drop below $4,000.
Bitcoin – Almost As Big as Netflix
Ever since the year begun, Bitcoin has been crashing record after record, but none was probably as significant as the one from this weekend. With its market cap up by over 50% since two weeks ago, Bitcoin came very close to big stocks like Netflix or Adobe, which a really remarkable achievement considering the cryptocurrency’s numbers from the same month last year.
Namely, during its peak on Tuesday, Bitcoin had a market capitalization of $73.05 billion. As reported by CNBC, this number would have made Bitcoin the 74th biggest stock on the S&P500, if Bitcoin was a stock, close to Adobe, with a market cap of $73.6 billion, and Netflix, with a market cap of $73.6 billion. Furthermore, Bitcoin would have already gone over big stocks like Costco and PayPal.
As for the future course, opinions from major analysts are split. Speaking to the news portal, Ronnie Moas from Standpoint Research said that Bitcoin could hit $7,500 by next year, while Goldman Sachs have a different prediction – that Bitcoin could have a short rise before a large price correction appears.