Bitcoin price continued its rapid gains last night, gaining 14% in its price and moving past the $13k mark this morning on all exchanges and data services tracking its price. As of this writing, it is trading at $13,244.39 on Coindesk’s index, up 16.16% from its price 24 hours ago. In the last one week, bitcoin’s price has surged by more than 40% on the back of news about social media giant Facebook’s move into blockchain and cryptocurrencies.
Bitcoin dominates liquidity in cryptocurrency markets and other coins mostly mirror its price movement. The top five cryptoassets by market capitalization all registered gains in their price during the bitcoin rally. Ethereum’s Ether was the biggest winner, registering gains of more than 14% in its price. As of this writing, it was trading at $352.07 at Messari Crypto’s index. Cryptocurrency markets also continued their upward movement, reaching a total market cap of $380.3 billion as of this writing. In the last week alone, the markets have added 34 percent or approximately $97 billion to their overall market cap.
How to Evaluate Bitcoin’s Price Rise?
The most immediate reason for Bitcoin’s surge is Facebook’s announcement of Libra –a blockchain and cryptocurrency for its social network platform. However, some, like Matt Hougan from Bitwise, contend that the current rally’s building blocks were laid last year, when institutional firms began investigating cryptocurrencies and blockchain applications and the SEC and CFTC began providing regulatory clarity about the status of cryptos as assets.
Mati Greenspan, analyst at eToro, stated that the rally was being led by investors who had parked their money on the sidelines in crypto markets. In other words, investors who had moved cash into alternate coins or stablecoins like Tether are now transferring funds back into Bitcoin. (But there’s also the argument that altcoins suffered an equally dramatic drop in prices last year during the crypto winter.)
The markets could turn a corner briefly in the near-term, he predicts. According to him, a retracement of 20% in bitcoin’s price is a possibility. His assessment is shared by Omkar Godbole at Coindesk. “Bulls generally take a breather following such stellar rallies. As a result, a sudden correction cannot be ruled out,” wrote Omkar Godbole at Coindesk.
On the other hand, Bitcoin’s current parabolic trajectory could result in the cryptocurrency hitting $100,000 by the end of this year, according to Simon Peters at eToro. At first glance, that might seem like a tall order but, if past history is any indication, it is a real possibility.