Bolstered by a range of bullish factors, bitcoin prices climbed nearly 8% in just an hour Thursday.
The world’s most prominent digital currency was driven higher by “a perfect storm,” explained market analyst Denis Vinokourov in a Forbes article.
“A combination of positive network fundamentals in the form of mining difficulty adjustment and a strong showing by the hashrate since correcting lower in March, together with technical price formation above 50DMA and aggressive stop loss hunting through $7,500, sent bitcoin soaring all the way to $7,800 level,” said Vinokourov, head of research for London-based digital asset firm Bequant.
Other market observers agreed, noting that multiple price drivers helped fuel bitcoin’s gains.
As a result of these developments, the digital asset climbed from $7,165.22 at roughly 9:30 am EDT to $7,725.67 around 10:20 am., a gain of 7.8%, CoinDesk figures show.
Since that time, bitcoin has been trading mostly between $7,500 and $7,600, additional CoinDesk data reveals.
At the time of publication, 3,25 am in Hong Kong, the price of bitcoin was $7,517, according to CoinGecko.
Going forward, the digital currency could be headed for additional gains, noted Vinokourov, who highlighted specific market factors.
“Futures contracts trading at a premium to spot prices (known as contango) supports the notion of further upside,” said Vinokourov.
Kiana Danial, CEO of Invest Diva, supported this optimistic assessment with some technical analysis.
“Bitcoin has just broken above the daily Ichimoku cloud, with the future cloud turned bullish,” she stated.
While Danial described this as “a bullish indication,” she noted that “we could see a temporary pullback in the coming days as it has already hit the resistance level of $7,746 which falls on the 38% Fibonacci retracement level.”
“From there, as the Ichimoku cloud continues to act as a support, we could see further gains above $8,000 towards the end of the month.”
Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, also weighed in.
“We saw BTC’s price finding support at the 50-day moving average for the last three days, which gave it the confidence needed to breach the resistance at $7,300 and almost test the 150-day moving average resistance today, which currently stands at roughly $7,800,” he stated.
“Moving forward, however, it is likely that we will see a pullback towards $7,300-$7,200 and consolidation in this range before bitcoin can rise above the 150-day moving average, which can pave the way” for a push toward $9,000.
Bitcoin halving is ‘non-event’
McGlone does not believe that the halving on May 12 will have any impact on the bitcoin price, since it is something that the market has already factored in: “It’s a non-event. Complete non-event, it’s for amateurs. Since when do known knowns matter in markets?”
McGlone was alluding to one of the main tenets of financial economics theory – the efficient markets hypothesis, which suggests that all the known information is already priced in.
Michael Sonnenshein, managing director at Grayscale Investments, also is not convinced the halving will have an impact on the price. On the latest edition of the On the Brink podcast, he said, “Historically, we’ve seen the having events that occurred in 2012 and 2016 be positive price catalysts for bitcoin price in the months that followed but that’s certainly not necessarily going to be indication of how the bitcoin price may react after this having event.”
However, both McGlone and Sonnenshein are bullish on bitcoin over the long term.
McGlone, who has decades of experience as a commodities trader, said he was really impressed with bitcoin’s robustness.
“The stock market had its biggest correction since the Great Depression, down 15%. I view that as quite significant that bitcoin is weathering this storm yet,” he said. “And the key thing I find about it, it’s never stopped trading, never stopped, never halted, didn’t have a third party guiding it.
“I view that as someone who’s been trading commodities my whole life is very impressive.”
He added that his bullishness is exclusive to bitcoin: “I’m not bullish on anything else other than bitcoin. I think the rest of the market is just a bunch of 5,000 wannabes.”
Sonnenshein said the halving would set “a very valuable stage for the role that decentralized currencies that are void of government intervention that do have a finite cap on their supply and are really not going to be subject to the policy-making decisions of that central authority.”