It has been a rather interesting week for flagship cryptocurrency Bitcoin (BTC) as it has made some very spectacular gains. More often than not, traders and investors are curious as to the reason behind Bitcoin price rally at this time. While it is not easy to find the exact reason for this volatility, it is not too difficult either.
1# Bitcoin is Still Scarce
No matter how one may want to look at things, Bitcoin’s primary selling point – at least for investors – has not changed in the slightest. It is still a very scarce form of money, albeit a few more BTC have been mined since 2017. With it's maximum supply not changing, it is evident the time to get in while Bitcoins are still being mined is slowly slipping through onlookers’ fingers. There will also be a block reward halving next year, which could very well factor in tot he current demand for BTC.
2# FOMO is Still a Thing
When a financial market moves up or down in an appealing manner, investors will try to get in on the action under any circumstance. In the case of Bitcoin, the latest gains were quite steep, which undoubtedly triggered a lot of (Fear of Missing Out) FOMO among onlookers, speculators, and traders.
Although there is a healthy correction taking place right now, it seems likely the uptrend will be resumed fairly soon. As such, there could be even more FOMO to buy in now that the price has come down to more normal levels for those who missed out earlier in the week. The same applies to the alternative markets, as those too noted very steep gains prior to heading south.
3# Market Trends Come Into Play
Technical analysis (TA) is often a blessing and a curse rolled into one package. Whether or not one believes TA works as a science, is completely irrelevant in the cryptocurrency industry. The current price levels are reminiscent of the surge occurring throughout 2017. It seems Bitcoin has met some key resistance at nearly the same levels as two years ago.
As interesting as that may sound, it is not an indication the price will hit $19,000 again. It is always a distinct possibility, but one has to watch these charts with a level head and without emotions. For now, the uptrend still looks incredibly promising, but there is no point in seeing another violent uptrend with a steeper downtrend shortly after. Slow and steady can win the race, which is another market trend prevalent during Bitcoin’s earlier days.
4# FUD Has Little to no Impact
Although the prices dominated most cryptocurrency discussions this week, other things happened as well. Several governments are still contemplating a complete ban on Bitcoin and altcoins. One of the new proposals coming to surface this week has had no real negative impact whatsoever. It is a form of FUD (Fear, Uncertainty and Doubt) which could destroy a market, but it doesn’t appear to impact Bitcoin as much as before.
That particular situation was very different not that long ago. Some may claim this is a sign of Bitcoin maturing as a market. Others will state how everyone has moved past FUD altogether. Which story is true in the end remains unclear, but it should not really matter either. The previous bull run showed how high one BTC could be valued, and there is a real chance it will happen again at some point.
5# Is There Really an Altcoin Season?
Many people firmly believe there is such a thing as an altcoin season. This week could have proven a lot of people right. Most markets noted major value increases, which is all one can ask for. However, there is also an opposite trend which needs to be taken into account. It all depends on one’s personal perspective.
The Bitcoin Dominance Index has risen significantly this week. So much even that it sits close to the 60% mark. This is despite most altcoins noting strong increases in USD value. Unfortunately for those markets, they also lost significant value over Bitcoin. There are always two sides to every medallion. This is no different where crypto trading is concerned.
1# Bitcoin is Still Scarce
No matter how one may want to look at things, Bitcoin’s primary selling point – at least for investors – has not changed in the slightest. It is still a very scarce form of money, albeit a few more BTC have been mined since 2017. With it's maximum supply not changing, it is evident the time to get in while Bitcoins are still being mined is slowly slipping through onlookers’ fingers. There will also be a block reward halving next year, which could very well factor in tot he current demand for BTC.
2# FOMO is Still a Thing
When a financial market moves up or down in an appealing manner, investors will try to get in on the action under any circumstance. In the case of Bitcoin, the latest gains were quite steep, which undoubtedly triggered a lot of (Fear of Missing Out) FOMO among onlookers, speculators, and traders.
Although there is a healthy correction taking place right now, it seems likely the uptrend will be resumed fairly soon. As such, there could be even more FOMO to buy in now that the price has come down to more normal levels for those who missed out earlier in the week. The same applies to the alternative markets, as those too noted very steep gains prior to heading south.
3# Market Trends Come Into Play
Technical analysis (TA) is often a blessing and a curse rolled into one package. Whether or not one believes TA works as a science, is completely irrelevant in the cryptocurrency industry. The current price levels are reminiscent of the surge occurring throughout 2017. It seems Bitcoin has met some key resistance at nearly the same levels as two years ago.
As interesting as that may sound, it is not an indication the price will hit $19,000 again. It is always a distinct possibility, but one has to watch these charts with a level head and without emotions. For now, the uptrend still looks incredibly promising, but there is no point in seeing another violent uptrend with a steeper downtrend shortly after. Slow and steady can win the race, which is another market trend prevalent during Bitcoin’s earlier days.
4# FUD Has Little to no Impact
Although the prices dominated most cryptocurrency discussions this week, other things happened as well. Several governments are still contemplating a complete ban on Bitcoin and altcoins. One of the new proposals coming to surface this week has had no real negative impact whatsoever. It is a form of FUD (Fear, Uncertainty and Doubt) which could destroy a market, but it doesn’t appear to impact Bitcoin as much as before.
That particular situation was very different not that long ago. Some may claim this is a sign of Bitcoin maturing as a market. Others will state how everyone has moved past FUD altogether. Which story is true in the end remains unclear, but it should not really matter either. The previous bull run showed how high one BTC could be valued, and there is a real chance it will happen again at some point.
5# Is There Really an Altcoin Season?
Many people firmly believe there is such a thing as an altcoin season. This week could have proven a lot of people right. Most markets noted major value increases, which is all one can ask for. However, there is also an opposite trend which needs to be taken into account. It all depends on one’s personal perspective.
The Bitcoin Dominance Index has risen significantly this week. So much even that it sits close to the 60% mark. This is despite most altcoins noting strong increases in USD value. Unfortunately for those markets, they also lost significant value over Bitcoin. There are always two sides to every medallion. This is no different where crypto trading is concerned.
