- Bitcoin breakout sees the cryptocurrency close in on its previous all-time high.
- Bearish and bullish explanations for the recent surge have emerged.
- Meanwhile, broader sentiment is bullish with analysts expecting Bitcoin to surge well into 2022.
This month has been an eventful month for the Bitcoin market as the pioneer cryptocurrency has experienced a spirited spike in price. Bitcoin’s price, having returned above $50,000 this week for the first time since early September, surged around 10% on the day to reach above $55,000.
The surge also coincided with the market cap of the largest cryptocurrency returning back above $1 trillion. As things stand, Bitcoin needs to surge around 20% from current levels – or add around $10,000 to its current price – to reach its previous all-time high.
However, sentiment is still divided as some analysts have pointed out bearish reasons for the recent surge. Popular analyst and investor CryptoWhale took to Twitter to explain what the single driver behind surge was, saying;
“The only reason we pumped yesterday was because someone (Tether) bought nearly $2 Billion worth of Bitcoin. The thing is, the BTC never left the exchange, which means there’s a high chance they will soon sell it. Just another ‘Bait-and-switch’ bull trap! Don’t get greedy!”
The long-time contrarian has held the same stance for a while, insisting that Bitcoin’s fair value is somewhere around $10,000 with the current price being thanks to Tether minting unbacked USDT to juice the price of Bitcoin. He warns that Bitcoin is likely to crash in the coming weeks due to the fact that the surge seems to be purely on the back of euphoric investors rushing back into the market, adding that there is still low demand for Bitcoin and a pile of the cryptocurrency is just sitting in exchanges waiting to be dumped and the manipulators start taking profits.
In contrast, some spectators have also pointed out other entirely bullish reasons as the single drivers for the surge. A Forbes article ties the pump to the fact that Wall Street giants were “pilling into the market.” Notably, in the past few days, some of the world’s leading banks have restated that they are bullish on Bitcoin. Just this week, the Bank of America (BofA) in a report stated that Bitcoin and cryptocurrencies have become “too large to ignore” and were “just in the first inning.”
Similarly, US Bank, a leading retail bank, this week launched a Bitcoin custody service for its clients in partnership with NYDIG, with plans to add other cryptocurrencies and sub-custodian partners.
The market also gained some relief from regulatory oversight concerns as the SEC chair Gary Gensler as well as president of the Federal Reserve Bank stated that the U.S. had no intention to follow China’s lead and ban cryptocurrencies.
Regardless, market sentiment is generally bullish for Bitcoin even for the mid-term. For market analyst Van de Poppe, Bitcoin is to surge well into 2022. The Dutch quant predicts that Bitcoin will probably reach $275,000 to $325,000 in quarter 1 of 2022 before correcting downwards again.