Bitcoin Moving Too Fast?
Bitcoin price has rapidly surged over $8,300 – it added another $500 within a 24-hour period. Moving at this fast pace, a correction should be expected as the 10-day upswing in the price – especially in the last few days – continues.
Aside the filed Bitcoin ETF application whose outcome is still dicey, there hasn’t been any major development in recent days to warrant a sharp spike in its value. Though decisions on some ETFs have been delayed till September, according to SEC, the wider crypto community is still agog with the much-awaited proposal from VanEck and SolidX which are currently under discussion and not affected by the recent postponement. SEC has received more than 100 comments for the proposal unlike those postponed that have about two. Inconclusively, if the awaited Bitcoin ETF gets approved, the bull run that will come with it may be similar to what the market witnessed in December 2017. But what if it doesn’t get the necessary approval? While a correction may be imminent, the momentum has to be sustained to keep away a downward market trend.
Secondly, the rapid push of the top digital currency is coming with a load of skepticism as it seems to be rising solo without carrying most others in the top 20 ranking along. When Bitcoin rises, it is generally believed that cryptocurrencies are making a comeback. However, many altcoins have either remained static or dropped in value in the last few days which is an indication that money has been flowing from them into Bitcoin whose 24-hour volume almost doubled from $4 bln on Monday July 23 by Wednesday. It leaves many wondering if this is either a major bull trap or some whales just playing tricks even as there seems not to be enough volume to sustain its ride up.
Between the suggestions that it is either institutional money that is pouring into Bitcoin or there is just a FOMO (fear of missing out) about the ETF approval lies a third one: the view of a general sentiment that just turned bullish. Owing to several factors including the support levels it has held and the tons of good news the industry has seen in recent weeks, it is common for higher Bitcoin price and its fast movement to generate interest from existing and new investors. The more momentum the price gains, especially as it is portrayed in the mainstream media, the more investors buy back in. But is this a credible yardstick to determine the sustainability of the price on a long-term basis? Time would tell.