Bitcoin’s Price Stabilizes Around $4000; Here’s Why
Bitcoin’s price regained strong momentum since the start of this week, which was supported by traders’ optimism that the market had hit its bottom last week. The Bitcoin price generated the most significant daily gain on Wednesday and its trading volume also spiked sharply over the past couple of days.
The price of Bitcoin rose to the $4,200 level after hitting this year’s low of $3,500 last week. The market capitalization of the largest coin also surged above $70 billion.
“The price rise today was most likely caused because investors may have realized that they overreacted by selling-off last week and decided to return to the market. Since the cryptocurrency market is still small, a few buyers can cause a surge in value by placing large orders,” the co-founder of CoinList, Andy Bromberg, said.
The end of the bearish trend in US stock markets has also been adding to trader’s optimism. The US stock markets have rebounded sharply since the start of this week following a massive collapse in the past two months. Mati Greenspan, the senior analyst at eToro, sees a considerable correlation between cryptocurrency and stock markets. He tweeted:
Traders’ interest also rose in crypto markets following the sharp drop in prices. According to Google trends, interest expressed by traders has reached the highest level in the past few months.
It appears that investors have started capitalizing on lower prices; Bitcoin buyers are looking to add positions while sellers are holding their position in the wake of a potential rise in crypto prices.
One crypto traders said, “Most people want to know when it’s safe to buy #Bitcoin for the long run. The answer is now. We will likely cruise at low levels ($2-5k) for a while. Don’t try to time it, “average in slowly during this time, throw a bit of your paycheck each month and hold.”
Some analysts are correlating the rally in Bitcoin’s price to the end of the hash war between Bitcoin cash investors.
The CEO of BKCM, Brian Kelly said, “You see the saga within the Bitcoin Cash community play out. People are starting to understand that Bitcoin is a legitimate asset class.”
Cryptocurrency markets are receiving substantial support from investors who believe the market hit the bottom last week; they see the dip in prices as a buying opportunity for long-term investors. Besides Bitcoin, the rest of the market has also generated positive momentum over the last two days.
What’s your opinion about the latest rally in cryptocurrency prices? Express your thoughts in the comment section below.