The Bitcoin simmer is turning into a mania that could help it reach $10,000 by Christmas, before heading for another major correction.
The people’s currency has passed several tests in recent weeks. One of them is the “technical test,” the crossing of price resistance marks like 5, 6 and 7,000 dollars.
That’s a bullish sign for investors who look at price and volume charts to determine the direction of the market momentum.
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That’s a bullish sign for investors who look at “market fundamentals,” major developments that could boost the demand for the digital currency.
A third test is the “China test,” the ability of the Bitcoin market to shake off a ban on the trade of the product in one of the largest markets for digital currency in the world.
That’s also a bullish sign for Bitcoin, as it proves to some that the digital currency can survive and thrive, even as big governments try to crush it.
Meanwhile, the calling off of the Bitcoin hard fork removed a source of uncertainty surrounding cryptocurrency markets.
These bullish signs have brought back the buzz for the digital currency, helping it get closer to the “tipping point,” the stage of the Rogers curve where the demand reaches a cascade. That sets the stage for higher prices, as there isn’t enough supply to accommodate the soaring demand.
Then there’s hype fueled by the higher prices that draw more investors into the market, pushing prices even higher.
And the higher Bitcoin prices go, the bigger the hype, drawing even larger numbers of traders and investors to the market.
Eventually, Bitcoin buyers will detach themselves from reality, buying Bitcoins with the anticipation of selling them to someone else at a higher price.
That’s how the Bitcoin bubble will turn into mania and drive prices even higher.
Perhaps, Bitcoin will cross the new landmarks of $8,000 and $9,000 quickly, possibly by Christmas, and reach $10,000, before the next big correction comes.
The speedy recovery after every major retracement since the beginning of 2017 is a phenomenon that has introduced some uniqueness in the trend pattern of the Bitcoin market.
Kumar Gaurav, Founder, and CEO at Cashaa tells Cointelegraph that it seems as if the recent Bitcoin price drop of almost 30 percent down from its all-time high of $2,791 was only a short-time crash like the previous ones in January and March 2017.
Bitcoin price recovered from less than $1,900 to over $2,200 within two days. This reminds us of the fast recovery in April after the drop from $1,300 to $900 and then going back to $1,300 within a month. As of the time of writing, over the past week, Bitcoin increased overall by 15 percent.
He notes that looking at the overall trend of the past two years, if you take out the three short runs leading to the crashes mentioned above, Bitcoin price can be seen as a parabolic curve. What attracts a lot of inquisition is how fast this pattern is moving to an increasingly near-vertical stage.
“Since April, we have seen a movement towards this stage, with the most recent run being longer and steeper than any run before it. In this case, if Bitcoin continues to quickly recover and resume a fast growth, we would see it around $10,000 within a year. Otherwise, if it goes back to a slower growth more consistent with the past two years`, it would “only” become around $3,000 within a year. In the long term, if the scaling issue gets solved, we may see it well above $10,000 sooner or later in any case.”