Mike McGlone at Bloomberg says, “Bitcoin is now at its most expensive level since just before the spectacular crash of the most widely owned digital currency.”
Last week BTC’s price rose above $5,000 for the first time since November and “the GTI Global Strength Indicator, a technical analysis tool, showed it’s the most overbought since its run-up to nearly $20,000 in December 2017.”
McGlone said, “The market got so compressed, volatility was so low, it just went poof! It broke out. It was released from the cage. Now it’s a question of duration and I suspect when you have such a massive bubble, you’ll always have an overhang of people who need to sell.”
Analysts have struggled to explain why BTC surged over the last week and while plenty of theories abound, bitcoin fans declared that the price has finally bottomed out.
David Tawil, president of crypto hedge fund ProChain Capital remarked, “We continue to expect another leg downward. It’s nice to see a positive move as opposed to a negative move, certainly. But at the same time, for investor purposes, it’s not a particularly comforting move. Certainly, an investor would much rather see a gradual rise with constant floors in terms of downside being established, as opposed to a very, very quick run-up. It could easily be easy come, easy go.”
Fundstrat and Tom Lee on the other hand support the thinking that bitcoin is showing a bullish trend and pointed out that BTC has now broken over its 200-day-moving-average.