At press time, bitcoin has risen by approximately 25 percent from its December low of $3,100. This morning, the father of cryptocurrency rose all the way to $3,900, though at the time of writing, that price has fallen back down to just over $3,700.
Still, it’s a serious step up from where bitcoin has been hovering. Late last week, the currency struck the $3,100 mark for the first time in over 15 months, marking its lowest position since the Thanksgiving bear rally. While bitcoin has been dropping all year, the past four weeks have proven to be among the most devastating. Ever since bitcoin cash forked the week before Thanksgiving, the largest cryptocurrency by market cap has been in serious decline, falling from the low $6,000 range to where it is now.
Some Say Bitcoin Is Improving
But it appears the asset is bouncing back, leaving many to wonder if the currency is truly recovering or if this a short-term fluke of sorts. Naturally, enthusiasts are witnessing speculation from every corner. Joe DiPasquale – CEO of the cryptocurrency hedge fund BitBull Capital – points to strong support near the $3,000 level and says that a short squeeze has “manifested.”
“Yes, the $3,000 support level and a short squeeze has helped bitcoin’s price recover, but there is also a lot of media coverage around Mark Dow closing his short position, which he opened when bitcoin was around $19,000 [last December], adding to the positive sentiment.”
The idea of the currency’s media coverage adding to its price was furthered by Joshua Frank, co-founder of the cryptocurrency analytics platform TheTIE.io. He claims that approximately 67 percent of tweets having to do with the asset are positive, while roughly 66 percent of those mentioning both bitcoin and the end of the year present a “happy picture.”
This doesn’t mean, however, that investors should just jump in head first. The market is still in a serious recovery phase. Marouane Garcon – managing director of the crypto-to-crypto derivatives platform Amulet – states:
“Right now, it isn’t a good time to buy, and it hasn’t been for a while. It’s too choppy.”
Investors Should Be Careful
Jon Pearlstone – publisher of the newsletter Crypto Patterns – echoes this sentiment, saying:
“While there are bullish signs since the December 15 bitcoin low, a 25 percent rally is not going to indicate there’s a strong case for much higher prices.”
Do you think bitcoin is healing, or will we soon see prices drop again? Post your comments below.
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