The Bitcoin price has been experiencing a fantastic period of price growth over the past two weeks. Signs of an upward trend were particularly clear on the 9th of March, when the price of the cryptocurrency increased nearly 10% over a 24-hour period; a move which pushed its market cap above 1 Trillion USD.
During that period, Bitcoin managed to rise from below $50,000 to over $54,000, putting the price in close range of its all-time record high price of $58,640 achieved on February 21st of this year.
While that previous high was marked by a dramatic 7% and concurrent 18% loss over the following days, the current upward trends appear to be moving onward and a steady pace.
Positive Bitcoin price trends for a record year
Tuesday of last week marked a total gain of $10,000 for Bitcoin since the start of March—an impressive feat in just nine days. Market analysts at the time predicted the cryptocurrency could be seeing record highs this year, with some suggesting the current pattern may reach above $100,000 in 2021—though such predictions are optimistic.
So how has Bitcoin continued to perform since that high-water mark on the 9th?
Well, trends continue to be positive. On Friday Bitcoin’s price briefly peaked at $59,000, surpassing its previous record by a slim margin. Within a 24-hour period, the cryptocurrency’s price fluctuated within a range of $56,327.79 – $59,242.58 according to the CoinDesk 20 on the media platform CoinDesk.
At the time of this article’s writing (March 20th), CoinDesk 20 puts the price in the $58,000 range with a market cap of $1.09 trillion.
In addition to the positive sign of its price, CoinDesk reports that, “BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians”. Despite this positive news, some experts are warning that Bitcoin can only sustain this rise for so long. The gains from its lows near $43,000 this month are impressive, but emerging patterns may be warning investors of a “rising wedge” taking shape.
The rising wedge and the long term
The rising wedge scenario is one where the forward momentum of Bitcoin’s value begins to fatigue. It means that, on a graph, the pattern tracking prices begins wide at the bottom, but contracts as prices move higher and the trading range narrows. In such a scenario, a rising wedge consists of converging trendlines that connect higher lows and higher highs.
Patrick Heusser, head of trading at Swiss-based Crypto Finance AG, was one of the first to warn about this potential bearish trend. In an interview with CoinDesk, he warned that a bitcoin price drop below $54,000 would act as confirmation that the rising wedge has broken down, and predicts that a drop to as low as $47,000 could follow.1
While this may sound negative, the news is not all bad.
After the Fed signaled that there will be no interest rate hikes until 2024 this past week, some analysts began predicting such a tone may encourage the rising price of cryptocurrencies.
Even Heusser, in the same interview, stated the following: “In terms of the bigger picture, I see no change. We are still in a bullish scenario, but the consolidation phase will take a little longer and that is not a bad thing.”
While investing in Bitcoin is never without risks and some cryptocurrency always entails some inherent volatility, market analysts seem confident that an upward trend for Bitcoin is likely in the long term.