Analysis: Bitcoin ends another rollercoaster week on the up

Bitcoin ended a week of ups and downs with a strong rise in its value.

It surged to an 18-month high of $13,850 on Wednesday, only to drop hours later and slump again on Thursday. Yesterday, it picked up the pace again and, at the time of writing, has crossed the $12,000 mark.

Simon Peters, analyst at eToro, believes that, partly stoked by Facebook’s foray into the world of cryptoassets, it could reach the all-time high of $20,000 within the next 7-14 days. This was the approximate timeframe to hit $20,000 from the last time we were at current levels.

“What’s interesting about this rally is that it doesn’t seem to be fuelled as heavily by new retail investors as previous rallies to all-time highs. Looking at historic Google trends data, the search terms for ‘Buy Bitcoin’ have typically spiked with the price as new retail investors jumped on the train,” he comments.

“The fact that trends data hasn’t spiked with price on this occasion suggests that new capital is instead coming from institutions, which bodes well for the long term, as well as money from investors who had previously parked their funds in stablecoins such as Tether.”

But is the surge sustainable? With the number of sell positions building in the market it’s possible we could see a correction very soon, Peters concedes. “Even if that was the case though, Bitcoin continues to remain on track to close out the first half of the year on a highly positive note. We could see it reaching $50,000 or even $100,000 this year,” he adds.

He concludes: “Altcoins, on the flipside, are getting pummelled with some trading at significant lows. If we do see a clear reversal in the trend of Bitcoin and the price starts to correct, we could start seeing some of that Bitcoin being exchanged into alts and other stablecoins.”