Bitcoin’s price continues to climb upwards against all odds, shrugging off the hard fork and leaving Bitcoin Cash in the dust. While many traders predicted that the Bitcoin market will suffer as a result of the fork, so far the charts say otherwise. Earlier today the price reached a brand new all time high of $3705, sliding down to the current price of $3649 on Bitstamp at the time of writing.
Bitcoin is up 7% today, as the bulls are leading the rally to uncharted territories. After testing support at the $3300 level, the price quickly recovered from the selloff and shot up over $150 in a matter of hours. Taking a look on reddit, tradingiew, and other popular trading forums, most traders are calling the latest price rise manic.
While that may be true, the charts look promising. For example, the current RSI is right at 70, meaning that while buy support is strong, the market isn’t quite overbought yet. However, if too many buyers try to FOMO their way to some coins, the RSI will break through past 70 indicating a dangerous territory.
Chart: Bitcoincharts
Many are also wondering where all the buying volume is coming from. Since the most recent price spike happened Friday morning U.S. time, and GDAX is seeing tremendous trading volume, we can assume most buyers are from the United States. Furthermore, taking a look at trading volume comparison charts from bitcoinity, we can see that in the past six hours GDAX was responsible for 25% of Bitcoin’s trade volume, compared to the average 14% in the past 30 days.
Source: Bitcoinity.org
Some news that also added to the bullish market include the recent Bitfinex announcement that they will no longer accept U.S. clients. According to their blog post, they will suspend individual verification requests. Meaning that if you would like to sign up a new account as a U.S. citizen you will be denied the verification request.
“We have for some time considered pulling away from the retail marketplace in the U.S., and now with a current backlog of verification requests and ongoing difficulties in providing USD deposit and withdrawals for U.S. individuals, we feel that the time has come to begin disengaging from U.S. retail customers.”
According to their statements, it is a tedious process to verify U.S. customers due to heavy regulations, which Bitfinex anticipates will only increase in scrutiny in the near future.
By restricting their platform Bitfinex is effectively limiting liquidity and creating a sense of scarcity on the market, which only further fuels the price rise. Since Coinbase is dominant in the U.S. when it comes to getting newbies on board, those U.S. users that sign up on Bitfinex are most likely looking to deposit existing coins and trade them for profit. Removing this “sell pressure” by restricting U.S. traders ultimately pushes the price higher.
The most likely scenario in the next few days, is that Bitcoin’s price will pull back to either low $3,000 or high $2900 levels before deciding on its next move. If the buy pressure continues and mainstream media like CNBC, Forbes, TechCrunch, etc. continue to push out Bitcoin articles, expect this rally to keep going.
As the price is approaching $4,000 many traders are making crazy predictions. Some say that Bitcoin’s price will reach $10,000 in a matter of months, others like Ken Goldberg – a Computer Science professor at UC Berkeley – predict that Bitcoin’s price may fall as low as $3.50. What are your predictions for Bitcoin’s price in the next month? Let us know in the comment section!
Disclaimer: This is not trading or investment advice.
