Is bitcoin about to fall behind? This is a question that’s making its way through many analysts’ heads given that over the past several days, bitcoin has hovered in one spot.
Bitcoin May Be Encountering a Few Barricades
The currency is presently trading for around $15,365, which is in the middle of the range it’s been traversing over the past week. Many analysts believed that if bitcoin was retaining its previous momentum, it would have likely hit $16,000 by now, though that isn’t necessarily the case, which is causing some doubt to spring up in the minds of industry experts everywhere.
At the time of writing, bitcoin is facing resistance at $16,000, and the fact that it hasn’t broken that position yet is cause for concern amongst some traders and crypto enthusiasts. It’s even more disturbing that the U.S. is on the verge of releasing a coronavirus vaccine that has been the most successful in all trials up to this point. Surely news like this could have potentially pushed bitcoin forward, though the world’s number one digital currency by market cap is staying exactly where it is.
Technical analysts blame what they refer to as the trading envelope, a move that means the bitcoin average is potentially reversing itself. While the effects may not be large or even long lasting, the move is designed to smooth out the present limits of all major digital assets. Right now, it looks like it has its sights set on bitcoin.
Since September alone, the cryptocurrency has shot up by more than 40 percent in price, but senior market analyst at Oanda Corp Edward Moya says that traders shouldn’t get too comfortable just yet. In a recent interview, he comments:
Today’s reaction mirrors gold, and it goes to show you that for many people, bitcoin is a safety trade. With today’s news, you have one of the biggest risk events taken off the table, for the most part, and you saw people quickly reduce their crypto exposure.
A Strong Burst in Value?
Despite the newfound attitude of gloom and doom, many traders and enthusiasts aren’t falling for the negative hype and believe that the present situation isn’t likely to last much longer. David Tawil – president of Pro Chain Capital – states:
I don’t take today as being indicative of any long-term trend, up down, sideways, whatever. The confluence of two major events I think put today in a separate category, so my expectation is that bitcoin will continue its march upward.
On a more positive note, the market cap of bitcoin has surpassed $280 billion this morning, meaning that the currency is now larger than Netflix, Disney and Bank of America combined. Granted this momentum can be sustained, the asset is likely to emerge as one of the largest commodities the world has ever seen.