The price of a single bitcoin traded at $6,000 for the first time since November 2018, continuing its stellar start to the year. Bitcoin is up more than 54% this year.
After rallying to a high of roughly $20,000 in 2017, based on investors jumping on the bandwagon and trying to get rich quickly, the bubble finally burst, sinking the cryptocurrency to less than $4000 within just a year’s time. Since the bitcoin boom in 2017, the world’s largest cryptocurrency has dropped more than 60% from its high.
Novogratz, a former hedge fund manager and Goldman Sachs investment banker, believes the cryptocurrency has seen its bottom. The only caveat would be if there was a catastrophic hack against a crypto exchange or a sudden shift in economic regulation.
“It would take something like that to shatter this newfound confidence,” said Novogratz, who is the founder and CEO of Galaxy Digital, a crypto merchant bank.
Nevertheless, Bitcoin did not appear to be materially affected by a massive security breach at one of the world’s largest currency exchanges. Bitcoin prices climbed higher despite the news that hackers stole $40 million of bitcoin from Binance, a Taiwan-based company.
Like Novogratz, many analysts are optimistic that the cryptocurrency market may have found a bottom.
“It’s all about momentum at the moment,” said Naeem Aslam, chief markets analysts at Think Markets U.K. “We are seeing a build up of OTC (over-the-counter) volume but its mostly buyers, we aren’t seeing any sellers looking to take positions off the table. It’s a really positive sign.”
“Many people are looking closely at the level $6,200 as a major resistance for bitcoin,” eToro senior market analyst Mati Greenspan wrote in a note to clients. “Though I don’t see any major significance for this specific number, I suppose it’s as good a benchmark as any.
Greenspan added, “The crypto markets have been on a roll lately. Bitcoin is significantly outperforming, not only compared to other crypto-assets but every other major asset so far in 2019.”
As the prospects of a Bitcoin exchange-traded fund (ETF) are looming, it could be more closely-watched given its latest price appreciation.