Bitcoin rose to a 10-month high
|Investors almost forgot about crypto-currencies as the crypto-winter kept prices low. At the end of the month of March, Bitcoin price were stalling below the $4,000 threshold as the outlook for this emerging asset class remained clouded. However, over the first half of May, the price of Bitcoin more doubled as it reached $8,330 on Tuesday morning. Over the same period, the market capitalisation of the most famous cryptocurrency increased by $73 billion to $146 billion. Similarly, the surge gave a boost to the entire market as the aggregate market capitalisation of the entire market (around 2170 digital assets) jumped $146bn to $243bn, up 66% in roughly two weeks.
Many theories have been put forward to explain why demand for cryptocurrencies has increased steadily over the last few months. Indeed, the total market capitalisation printed a low at $100bn on December 15th last year. Since then it has moved only one way: up. Technical analysis is often put forward to explain crypto markets, while fundamental analysis is often overlooked. Recently, it looks like Bitcoin behaved like a safe-haven assets against the backdrop of worsening risk sentiment, thanks to heightened US-China trade tensions and escalating confrontation between Iran and the US over the former’s nuclear program. However, we believe that despite the fact that cryptos have remained in the shadow lately, the global environment as kept improving: regulators and legislators had time to determine how cryptos should be regulated, more and more retailers adopted them as mean of payment (Amazon, Microsoft, Whole Food, Bed Bath & Beyond, Lowe’s, and many more) and institutional money kept flowing slowing into cryptos.
Stay on top of the markets with Swissquote’s News & Analysis
Crypto prices have rose massively lately and in a short period of time. Even though, we remain bullish on Bitcoin, and cryptos in general, we doubt that the current pace of increase is sustainable. Therefore, that would not be a surprise to us should the market experiences a sharp correction in the coming days. For now, Bitcoin is stuck below the $8,480 resistance (high from July 25th 2018).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.