Although we have yet to see whether the recent surge in bitcoin prices marks the end of this year’s down downtrend, the 20% gain over the past few days had some “HODLers” cheering and hopeful.
Bitcoin posted its biggest weekly advance since its peak at almost $20,000 in December. Other major cryptocurrencies like ripple, ether, bitcoin cash and litecoin also gained.
Bitcoin is anxious to get back up after it slumped to almost 52% at the end of the first quarter of 2018. Some say it’s the worst start of the year for bitcoin. As the deadline for filing taxes in the U.S. approaches, analysts predict bitcoin’s price to go up again as investors are done selling their crypto to pay off outstanding balances.
Fears and concerns on the regulation of cryptocurrencies, following China and the U.S.’ tightened control on the industry, must have affected bitcoin’s prices. In addition, Facebook, Twitter and Google’s banning of crypto-related advertisements on their platforms heavily affected digital coin sales.
“News flow had turned less negative on balance, most of the tax selling had finished and there was a sizable short position that had been accumulated so a few large players took note and once we broke above technical resistance it was off to the races,” said John Spallanzani, a portfolio manager at Miller Value Partners.
Hedge fund Pantera Capital Management noted on Thursday that another reason as to why cryptocurrencies are gaining might be due to larger investors entering the market. George Soros, the billionaire investor who initially called cryptocurrencies a “bubble”, was said to have authorized his family office to trade digital assets last week.
Tom Lee, Managing Partner and the Head of Research at Fundstrat Global Advisors, said the recent lows levels imitate the 2013-2105 troughs.
Lee said in a note on Friday that “The risk/reward for BTC is still asymmetrically positive”. He goes on to say that “We think capital gains-related tax selling played a factor in the recent weakness (not the only crypto to fiat outflow driver, Mt. Gox is another) and these pressures should be alleviating soon”.