Bitcoin prices have climbed more than 200% over the last several months, rising sharply amid strong sentiment and bullish momentum.
The digital currency’s price reached as much as $9,409.34 today, according to CoinDesk, hitting a fresh, 2019 high.
At this price point, bitcoin’s price had more than tripled since December, when it fell to nearly $3,100, additional CoinDesk figures show.
While the world’s largest digital currency by market value had to suffer through the so-called crypto winter, dealing with a period of prolonged stagnation, bitcoin has been showing significant signs of strength.
A perfect example is the sentiment surrounding the cryptocurrency.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Strong Sentiment
Joshua Frank, cofounder of digital analytics platform TheTIE.io, shed some light on the optimism of investors by providing specific figures.
“We are currently [experiencing] the most prolonged period of positive long-term sentiment (100-day moving average) since mid-2017, which led up to Bitcoin hitting $20,000,” he stated.
“Bitcoin’s 100 day average sentiment score turned positive on February 17th 2019 when Bitcoin’s price was at $3,673.11 and has remained positive for 120 consecutive days,” added Frank.
“Since turning positive the price of Bitcoin has more than doubled,” he emphasized.
The graph below depicts the relationship between the cryptocurrency’s price and its 100-day average sentiment score.
Analysis of social media activity also seemed positive for bitcoin, with Frank noting that “100 day average tweet volumes on Bitcoin are now at their highest levels since December 20th 2018.”
He emphasized that while “while Bitcoin tweet volumes remain significantly below their all-time high, we have seen noticeable growth.”
Frank further added that:
We are also witnessing a massive increase in the percentage of tweets coming from unique twitter accounts. Not only are the number of tweets on Bitcoin increasing, but they are increasingly coming from unique users. This metric hit an all-time high earlier this month.”
If these measures of investor attitudes remain bullish, bitcoin prices will keep climbing toward the $10,000 level, he predicted.
“If sentiment remains positive from a long-term perspective and tweet volumes continue to rise we expect that Bitcoin will continue to appreciate. If the trend continues we should see Bitcoin above $10,000 within short order.”
Technical Analysis
While Frank sought to explore the general feelings of traders by evaluating social media activity, other experts harnessed technical analysis to get a better sense of where bitcoin prices are going.
Jon Pearlstone, publisher of the newsletter CryptoPatterns, weighed in on the subject, first looking at XBT futures, which are cash-settled contracts for the world’s largest digital currency by market value.
“The XBT Bitcoin futures were showing some bullish patterns not seen in recent months, and these patterns broke out above the $8600 mark,” he noted.
“This is a good indicator that larger Bitcoin traders and investors are showing bullish sentiment which has set Bitcoin up for a test of the key $10,000 level,” Pearlstone stated.
Key Role Of Altcoins
Pearlstone also noted the key importance of price movements in altcoins (cryptocurrencies other than bitcoin), saying that:
“While there is moderate technical resistance at the $9500 level between BTC’s current prices and $10,000,” “price action in the XBT futures and the large altcoin market will likely be indicators of Bitcoins next move.”
“Most large altcoins including Ethereum and Litecoin have not broken out of recent bull patterns like Bitcoin did over the weekend,” he noted.
“If they join Bitcoin in breaking out, this would be a sign of strong bullish sentiment and should bring a test of $10,000 and potentially higher targets for Bitcoin.”
Possible Correction
While several analysts who contributed input for this piece offered bullish perspectives, not everyone had the same point of view.
Some market observers emphasized that bitcoin could easily suffer another pullback before rising to $10,000.
“We are likely headed for a correction before bitcoin hits $10,000, however the general upward trend will likely continue throughout 2019,” said Chris Keshian, a cryptocurrency investor and former hedge fund manager.
Simon Peters, an analyst for social trading platform eToro, offered a similar perspective, stating that:
“We’re due a significant correction still and prices could fall back to as low as $6,500 before the next major rise.”
