At around 15:00 UTC on Tuesday, Feb 11, Bitcoin shrugged off a two-day selloff period and went back up above $10,000, offsetting losses sustained within an hour of trading. Naturally, crypto investors are thrilled, more so with data indicating that this move represents a true price recovery, unlike earlier upswings.
On Feb. 9, the price of Bitcoin breached the $10,000 mark for the first time since September. However, celebrations were shortlived as a flash crash sent the price back down from around $10,200 to the lower $9,700 levels and attention once again turned to waiting for a price rebound.
Market watchers didn’t have to wait long as the push back into five-figure price territory happened about two days later with BTC cresting at around $10,490 levels just a few hours after retaking $10,000. At the time of writing, Bitcoin appears to be retesting $10,400, which analysts believe to be crucial to staving off losses.
“The range is defined by the resistance at $10,400 and the possible lower support zones at $9,500 and $9,800. If the price can’t break the $10,400 area then it will then likely pull back to retest this area,” said Markets trader, Michaël van de Poppe.
What Makes This Price Move Different Than the Last Bull Run in June?
Bitcoin is now up 44% this year, it’s highest in over five months since the 2019 all-time high of almost $14,000. Of course, this is not the first time we’re seeing such a rebound and the market has remained volatile but analysts believe this current move above 10K is different.
In a recent interview on CNBC’s ‘Fast Money,’ analysts were asked what the difference was this time around. The first analyst pointed out that the market had shaken out most of the weaker players and that institutional investments were now involved.
There was also reference to central banks researching their own cryptocurrencies and trying to catch up with the digital payments space. It’s no coincidence that the number one cryptocurrency consolidated its $10,000 price level moments after U.S. Federal Reserve chairman, Jerome Powell acknowledged the importance of blockchain development and anonymous transactions at the central bank.
“In a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In a world of fiat currencies, Bitcoin is the victor.” said one of the analysts.
The bitcoin as a safe-haven narrative was also brought up amid increasing concerns about the coronavirus. In the past, this theory has been rubbished by gold punters, stating that gold and Bitcoin are nowhere near alike in terms of being safe-haven assets. But it would seem the general market is starting to pay attention.
Other analysts believe that with investor velocity moving up, we could be looking at a mega bullish scenario. This is a vital metric since it indicates a desire to hold BTC for the long-term instead of engaging in short-term trading.
Lastly, there’s the Bitcoin halving set to occur sometime in May. Historically, a halving event has always been bullish and there is currently no solid evidence why this one should be any different.
Where Do We Go From Here?
Bitcoin’s $10K breach represents a shift in trend from bearish-to-bullish in the mid-term and bullish sentiment expects it continue to printing new highs in 2020. Nevertheless, the market remains turbulent so it’s important to remain vigilant.