Bitcoin today made another sustained increase, reaching a high not seen for almost three months. From here it is a very short distance to $10,000 – but is BTC managing to get there this week?
Bitcoin wins another 5 percent
By the third day of the week Bitcoin has made further gains. This latest move, which began a few hours ago during Asian trading, drove prices to highs not seen since early November.
The 5% pump lifted BTC from around $8,950 to a high of $9,400, as the charts on Tradingview.com show.
From here, it is down to $600 to five figures. This could be reached this week if the momentum continues. Bitcoin has not seen a sustained month of solid gains since April last year, when it shot up from $4,000 to $5,500.
So far this month the asset has reached almost 30% – one of the best January in its short history.
Analyst and trader Josh Rager has commented on the correction concerns that are still hovering in the crypto-twitter verse. According to him, the downtrend was clearly broken and a closing price of over $9,557 in the weekly time frame would confirm another higher high.
How long you bears going to stay bearish?
The downtrend is clearly broken on high time frame and if Bitcoin closes above $9557, that's a higher-high
Sure, BTC could pullback but stop with the $5k calls until price breaks at least below $8k (if it even gets there again) pic.twitter.com/MHLuSQih6M
— Josh Rager 📈 (@Josh_Rager) January 28, 2020
Bearish sentiment is coming from open interest in BitMEX, which is approaching $1 billion. In previous cases there has always been a retreat at this level.
Jacob Canfield, guest trader at Forbes and CNBC, comments:
“Every time we hit $1 billion, we have seen a pretty big sellout.”
“Open interest on #bitcoin is currently at $943 million. Every time we’ve hit $1 billion we’ve seen a pretty big sell off. Let’s see if this time will be different.”
– Jacob Canfield (@JacobCanfield) January 28, 2020
Bitcoin as a safe investment
Whether or not there is a withdrawal, Bitcoin’s performance so far this year has been phenomenal. The “safe investment” thesis has strengthened, as was clearly seen in the two major incidents in January.
Tom Lee of Fundstrat has compared the returns on Bitcoin and gold, and Peter Schiff has been particularly quiet on this issue.
“Bitcoin performs best in the YTD +26% asset class… demand for ‘safe havens’ is driving Bitcoin, and #Bitcoin is probably considered a better ‘safe haven’ than gold.”
“Bitcoin is best performing asset class YTD +26%… demand for “safe haven” is boosting Bitcoin and arguably, #Bitcoin is seen as a better “safe haven” than $Gold #gold – Gold is up a decent 3% vs a whopping 26% for Bitcoin pic.twitter.com/GWKEfYGcut”
– Thomas Lee (@fundstrat) January 28, 2020
Geopolitical tensions, economic adversity and virus outbreaks on an overpopulated planet running out of food will continue.
There will always be a need for safe investments – and younger generations are likely to turn to something digital, such as Bitcoin.
FOMO will probably continue, especially if BTC reaches $10,000 within the next week (or so). The halving is now only 104 days away – and that is likely to keep the momentum going.