Bitcoin soars to six month high, will it hold momentum?

Last Updated: Fri, May 03, 2019 11:56 hrs
Bitcoin Investments

Bitcoin prices in the past month have gained momentum and are trading at levels of $5,500 per coin. Price on crypto indices suggest that Bitcoin was trading range-bound at levels of $5594 per coin on Friday.

A fortnight ago, Bitcoin prices soared to $5642 per coin, the highest in as many as six months.

Bitcoin, which has had a free-fall in 2018, sank to a lowest of $3191 per coin in the past year. The highest it had touched was $9,964.50 in the last year. There have been a number of reasons factored in by analysts for the slump and then the sudden resurgence.

Fundstrat technical strategist Robert Sluymer explained in a note that a second rally to nearly $6,000 levels was anticipated. The agency developed its own indexes by analyzing various cryptocurrencies. Sluymer's colleague Tom Lee, regarded as a Bitcoin Bull, had in fact forecast the 2018 year-end price target at $25,000 per coin. However, Bitcoin slumped to $4000 during the year-end and Lee dumped time projections off his research.

Sluymer on the other hand in a note wrote "Bottom line: use recent weakness to accumulate."

Delphi Digital, another research agency, in a Dec'18 report said that Bitcoin would touch a bottom during the first quarter of 2019. Well, Bitcoin prices indeed slumped to a low during the first quarter.

Charts like the following have been tweeted by many analysts to suggest either an accumulation or a high coming soon.

However, for all the hope, there have also been a number of analysts who have pointed out that the Bitcoin may lose steam.

One of the reasons attributed to the Bitcoin losing steam is the usage of the currency to transmit money. Bitcoin, a peer to peer payment mechanism still does not have a global use-case. Tom Lee in an interview to CNBC last month attributed 11 reasons and observations including positive fundamentals for a resurgence. Speaking about usage, he said the devaluation of the Turkish Lira and the Venezuelan crisis had prompted many to switch to Bitcoin as an alternative to cash. Lee also said that the last low was a crypto Winter and that the spring had arrived.

But have volumes really grown? And how long will the Spring stay? These are questions BTC traders and peers are curious about.

For the record, Facebook was reported as building a crypto-currency based payment system. It has been said that the Zuckerberg's social media giant was hiring merchants and financial firms to stitch together a payment system.