Bitcoin is gaining momentum and traded above the $17,500 mark on Tuesday. The last time the cryptocurrency touched its all-time high of $20,000 was back in December 2017.
Further Momentum? Many believe it's possible the digital asset hitting could hit a new high and overcome the psychological barrier of $20,000.
“Bitcoin has spent 0.32% of its life at $16,000 and above, which means there were relatively very few buyers at that level back in 2017," says George McDonaugh, managing director of publicly listed cryptocurrency firm KR1.
"Also the space was smaller in terms of participants. This correlates to there being very few sellers at this level now, meaning there isn’t a strong resistance band for the bulls to push the price higher."
There have been a number of factors that have pushed Bitcoin higher, such as the narrative from central banks around the adoption of digital currencies and major investment institutions diversifying into Bitcoin is driving the current interest and bull market, a narrative McDonaugh expects to continue in the future.
No Slowing Down: “Bitcoin passed $17,500 on Tuesday and is less than 15% from its ATH with no sign of slowing down,” says Lolli CEO Alex Adelman.
“This bull run is different than 2017. We’re seeing progress from major players like CitiGroup, J.P. Morgan, Paypal, and Druckenmiller — they’re all betting big bitcoin as a safeguard against inflation, uncertainty, and the turmoils of 2020. Increased institutional adoption is growing bitcoin’s price, fueling further adoption,” adds Adelman.
Bitcoin Is Erratic: “Be warned though," says McDonaugh, "as we’ve seen so many times in the past, Bitcoin can surprise and if going by the cycle trading were due a pull-back soon. I expect we don’t reach $20,000 in this current move and consolidate before going again and breaking through in early 2021. That’s how bitcoin has liked to behave in the past.”
The Grayscale Bitcoin Trust (OTC:GBTC) was up 6.7% to $20.14 at publication time.