Bitcoin has consolidated above $10,000 this week, gaining 45% year-to-date. According to a technical analyst, the rally hasn’t consumed yet.
Bitcoin Enters High-Momentum Phase
JC O’Hara, chief market technician at MKM Partners, told CNBC’s “Trading Nation” yesterday that cryptocurrencies tend to trade in two distinguishable phases. The first is the dormant consolidation phase, which is followed by a high-momentum phase. As of today, Bitcoin is fluctuating within the second one.
And when you look at bitcoin we’re starting to see signs that the dormant consolidation from the second half of last year is slowly starting to change in terms of positive bullish momentum here
After surging to above the $12,000 level in June, the king of crypto started to lose momentum and consolidate. The cryptocurrency touched the bottom in mid-December and has been rallying since then. O’Hara said:
We broke out of the downward sloping trend channel. We’re breaking above the $10,000 psychological level, and we’re of the opinion that positive momentum will continue to follow positive momentum. So that’s why we think in the short term we could see $12,000 on bitcoin.
At the time of writing, BTC is trading at $10,250 as of 3:20 PM UTC, slightly declining over the day. Nevertheless, the largest cryptocurrency by market cap has been bullish this week, supported by technical analysis reasons and fears of the coronavirus outbreak. Bitcoin could exceed the $11,500 level in the next few days.
Skeptics Say it’s Another Hype Cycle
While the crypto community expects the halving event and anticipate it to push Bitcoin prices higher, some analysts argue that the current rally is not backed by anything significant.
Michel Rauchs, who published several studies on cryptos and blockchain for the Cambridge University, told Reuters:
The recent rally has been driven by the usual hype cycle that we have very reliably seen every two to three years. We have these mini-bubbles, and the momentum that it creates – bitcoin first, then these other coins. It’s a self-fulfilling prophecy
There are more balanced opinions as well. Mark Tepper, President of wealth manager Strategic Wealth Partners, is holding Bitcoin but is not a big believer right now.
Tepper told CNBC that if BTC would move higher, “we’d be happy but if it goes to zero it’s not going to change our lives.”
He says that it’s too early to call Bitcoin an investment.
Do you think Bitcoin will reach the $12,000 level by the end of next month? Share your thoughts in the comments section!
Image via shutterstock
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