In what could be termed at surprise recovery for Bitcoin, its prices surged 7.5 percent, from the level of $3,625 to $3,900 within a short span of nine minutes. Taking the cue from the Bitcoin, other Crypto assets also surged with Ethereum recording a 13 percent upswing from the position of its day’s bottom.
Even though Bitcoin and other cryptocurrencies recovered marginally and have only matched price level of market recorded on Thursday, the gain is seen as a significant boost to the morale of the crypto investor who is reeling under the effects of the bear market for quite a long time now. Overall, the crypto market and investors welcomed this short-term gain with open arms.
In the larger picture, the surge in the prices of Bitcoin from $3,000 to $4,000 is going to have little impact on the short-term behavior of the cryptocurrency. However, given the turbulent nature of the crypto market filled with doubts and uncertainty, even the small respite can prove to be instrumental in reigniting investors’ confidence. Many crypto experts agree on the fact that until and unless Bitcoin passes through the resistance level of $5,000-$6,000, it would be difficult to confirm that coin is headed for a trend reversal. Some others comment that if the Bitcoin is not able to break through the level of $6,000, its value might plunge to $3,120 which would be its lowest value in the year.
For Bitcoin to make a strong comeback, it requires to establish a solid bottom, and from there, it needs to make a gradual recovery on a monthly basis. However, this recent surge of the coin indicates that Bitcoin’s bottom range is considered between $3,000-$3,500 by the market with investors now buying the assets around $3,500 to achieve future gains.
As previously noted by the Chief Executive Officer of FX hedge fund, Su Zhu, Bitcoin investors set a buy wall at the level of $3,300 on the crypto exchanges like Bitstamp and Coinbase. In fact, it was this buy wall which prevented the prices of the crypto from falling below its yearly low, triggering strong support for the Bitcoin in the range of $3,000.
There is no denying the fact that Bitcoin prices may drop to their yearly-low levels with many experts predicting the value may even drop to a level of $2,000. In the short term, however, expect the price volatility to play a significant role in keeping Bitcoin’s value in the range of $3,500-4,500. But, if Bitcoin prices go beyond $5,000 then, of course, it will signal a proper trend reversal for the cryptocurrency. Another reason for the modest prices of Bitcoin is the relatively low cryptocurrency market volume which is pegged at $15 billion, down by $5 billion from its level recorded on mid-December.