Bitcoin Enjoys a Fresh High
The world’s most popular cryptocurrency, Bitcoin, looks set to enjoy its first positive month since July 2018 following a string of seven consecutive monthly losses, prompting some experts to predict that the tide might be about to change.
Before the latest high, analysts at Invest in Blockchain carried out a poll to determine whether traders believed if the Bitcoin market had already hit rock bottom, and 41% of those who responded in the affirmative.
If these beliefs are true, not only Bitcoin, but other cryptocurrencies such as Ethereum, Ripple, and EOS could see gains in the market as the year goes on. But, regardless of whether the fortunes of cryptocurrencies are set to change for the better, it begs the question, “what’s triggered the first positive month for Bitcoin in seven months?”
According to Naeem Aslam - commodities, equities, and FX expert at Forbes – the break in the popular cryptocurrency’s downward spiral has been brought about by just one contributing factor – price action.
He explains that an RSI of around 30 means that the price is oversold while an RSI of below 30 even more so, which typically attracts new buyers in the market. RSI stands for Relative Strength Index, and is used to identify overbought and oversold assets by “comparing the magnitude of recent gains and losses over a specified time period to measure speed and change of price”.
Aslam says that the Bitcoin price “had been way oversold” and, therefore, most people believed that the series of consecutive monthly losses that the cryptocurrency has experienced to-date could not last forever.
He believes that the sell-off pressure should ease off provided that the crypto’s price closes above the open price of February 2019 – the 3405-level which, in turn, should attract more buyers into the market.
At the same time, the cryptocurrency market, in general, should benefit over the coming months with experts pinning their hopes on the improvement of the transaction volume for on-chain transactions. And, as more industries are turning to the on-chain infrastructure, this will attract growth.
Aslam also thinks that the current performance of Ethereum will help to bolster Bitcoin thanks to it staying above the $100 mark. As the second biggest coin, Ethereum is the most commonly used protocol for enterprises, and deposit hitting a low of $100 in early February, the cryptocurrency experienced an even greater low of $80 in mid-December 2018, indicating that its price is likely to rise moving forward.
Other positive factors that are currently causing momentum in the crypto market include e-commerce giant, Rakuten’s latest version of its mobile app seem to indicate that it will support cryptocurrency payments as well as fiat currency. Plus, two days ago, Argentina announced that it would accept Bitcoin payment for goods sold to Paraguay. Finally, a decision is due to come back on the NYSE’s application for five Bitcoin ETFs within the next forty-five days and, if approved as the market is hoping, it will involve institutional money.
By Laura Kilby.