After touching below $6,000 twice the past month, Bitcoin gained 10% on Tuesday, reaching a high of $7,387.24–its largest price increase in three months. Bitcoin’s push past the $7,000 mark is the first time the cryptocurrency crossed that price threshold in five weeks.
Cryptocurrency analysts say the jump is largely attributed to Bitcoin reaching critical technical levels following a sell-off since the beginning of this year. Bitcoin surpassed the $20,000 price mark last December, but has fallen unceremoniously since then.
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“The $6,800 level was massive resistance for three weeks and I think people were shorting against that and they just got their face ripped off,” said Brian Kelly, CEO of BKC.
Per MarketWatch, the latest rally “has been aided by four consecutive winning days, which if gains hold also would represent its longest stretch since April. A single bitcoin last changed hands at $7,371.87, up 10.7% since Monday 5 p.m. on the Kraken crypto exchange.”
Despite the uptick, there are still naysayers who advise against allocating any investment capital into the cryptocurrency, including Nobel Prize-winning economist Richard Thaler who echoed famous investor Warren Buffett’s sentiment.
“Warren Buffett says a lot of smart things, and one of the things he says is, don’t make investments in things you don’t understand,” said Thaler. “And I have no clue [when it comes to bitcoin].”
Conversely, there are the bulls who feel that cryptocurrencies and blockchain technology, the underlying technology that forms the basis of cryptotcurrencies, present an opportunity. Investment firm BlackRock currently has a team exploring cryptocurrencies–a move by an institutional investment giant that could be a boon for Bitcoin and its cryptocurrency peers.
“BlackRock exploring crypto assets comes as no surprise and is definitely a positive development for the crypto market,” said Chris Yoo, a portfolio manager at Black Square Capital Management LLC. “As the largest asset manager in the world, its interest in crypto assets could be a catalyst for upward price movement and encourage other asset managers, even with more conservative strategies, to seriously explore investing in the crypto space.”
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