After a bearish 2018, Bitcoin and the whole crypto market now enjoy a positive year so far. In the past two months alone, the largest cryptocurrency has crossed the $4,000 mark twice. As bitcoin oscillates around $4,000, it is believed to be consolidating gains before moving higher. Commentators and analysts at BitBull Capital point to various reasons responsible for the rise and believe that BTC may hit $5,000 soon. Here are the major reasons:
Increasing Volume and Price Consolidation Around $4,000
In the past three months, BTC has traded sideways with occasional short bursts evident. The bursts originated from various events and developments within the cryptocurrency sector. However, the primary indicator is the increasing trading volume that currently stands at $9.3 billion. During this month alone, the trading volume has crossed the $10 billion level five times.
The last time that Bitcoin reached these volumes was in late April – early May 2018. During that time, the price of BTC oscillated in the $9,200 – $9,800 range. These volumes are deemed as confidence boosters at the current price. They signal price consolidation, increasing activity, and possible accumulation that will, in turn, result in a steady price appreciation.
Growing Interest around Blockchain Technology and Crypto Industries
The increasing Bitcoin volumes indicate a growing engagement that may arise from the budding interest around the crypto and blockchain sectors in 2019. JPMorgan launched their JPM Coin followed by the Facebook rumors of launching an in-house digital currency. Also, the CEO of Twitter, Jack Dorsey, said he will acquire $10,000 worth of Bitcoin on a weekly basis.
In February, Samsung unveiled its flagship Android phone, the Samsung Galaxy S10. The device came with a built-in crypto wallet further growing the interest in the cryptocurrencies. Another milestone for Litecoin and Bitcoin adoption came when the Venezuelan government officially approved a crypto remittance service for locals to get payments in digital currencies.
Additionally, Fidelity launched its crypto custody solution for exclusive clients. The custody services focused on the needs of pensions, hedge funds, endowments, family offices, and several other institutional investors.
Futures Market Catalysts
Futures contracts are largely to blame for the plunge of Bitcoin from the near highs of $20,000. The contracts enabled traders to profit from shorting the digital asset. Since that time, Bitcoin price closely correlates to the start and expiration of new futures contracts executed by major exchanges like CME, CBOE, and BitMEX.
In an official statement earlier this month, CBOE suspended the creation of new futures indefinitely. On the other hand, BitMEX initiated new futures contracts starting from March 15. Since BitMEX futures currently show a volume of around $1 billion, the price surge may also be attributed to the launch of new, September futures.
Better Fees and Increasing Adoption
Bitcoin has undergone several technological improvements. The SegWit addresses and Lightning Network have reduced network congestion and transaction fees. The settlement times now rank better than before. The average Bitcoin transaction fees dropped to $0.05 from around $0.15 by March 16.
These developments encourage Bitcoin adoption with Avnet and Digitec Galaxus announcing that they will accept bitcoin payments. The increasing adoption and usability improvements prevent the crypto from dipping further but instead, Bitcoin oscillates around $4,000. The developments seem to benefit the whole crypto market boosting the confidence of analysts and commentators that Bitcoin will surge.
The $5,000 target price for 2019 is achievable sooner rather than later given the recent market developments and price trends. Today, the $4,000 level is fundamental and BTC must break through the $4,300 mark before an easier climb towards $5,000.