Can the Bitcoin rally last this time?
The last time Bitcoin dominated the media in the fourth quarter of 2017, it jumped from less than $ 10,000 to just under $ 20,000 in less than a month.
The recent Bitcoin rally has seen the cryptocurrency of the claws of a bitter bear market grow from $ 5000 at the beginning of April to $ 12,935.58 at night, its highest level since January 2018. Bitcoin went up 15% in one of his largest rallies of a day in a month while booking his eighth consecutive session of earnings. Can Bitcoin keep the rally this time?
What is causing this last rally?
Facebook. The popularity of Bitcoin has skyrocketed since Facebook announced it would launch its own cryptocurrency, the Libra. This is a big problem for cryptocurrencies. We just have to remember last year when Facebook withdrew its ICO’s support on its site and the price of Bitcoin collapsed.
What is the pound?
The digital currency of Facebook has been created as a means of payment and for international money transfers. He still has a lot of hoops to jump in when it comes to regulation, but he certainly has the industry on alert.
So, why does it matter?
By launching its own cryptocurrency, Facebook is giving legitimacy to cryptography in all areas. When a technology giant such as Facebook jumps behind cryptocurrencies, general acceptance is much more likely, which increases expectations of future demand. This is being interpreted as a massive vote of confidence from a very important player. It’s not something that the markets are going to ignore. As with all limited resources, increased demand can have a significant impact on the price and quickly.
It can last?
The rally at the end of 2017 was based mainly on the fear of getting lost (FOMO) when the world began to learn what Bitcoin was. The trend data from Google for Bitcoin showed that interest in Bitcoin was much higher than at present. Another important difference is the number of transactions per second in the chain of bitcoin blocks, 3.5 transactions per second *. This level was only reached briefly in 2017 before it fell. So certain facts and figures to support a long-term rally.
Possible winds against
However, while the fundamental factors are aligning in support of Bitcoin, there are still some potential headwinds in the not too distant future. A halved event, when the mining reward is reduced to half overnight, is scheduled for May of next year. Litecoin is expected to be halved in August, which could have a negative impact on cryptocurrencies in general.
And the letter?
Technically, the painting also raises some questions about the duration of the last rally. While Bitcoin remains firmly above its 100 and 200 small, the RSI indicates overbought conditions. Bitcoin has risen 133% so far this quarter. Bulls often take a breath after a stellar rally, so a correction can not be ruled out.
* Blockchain data