Bitcoin soared past $10,000 for the first time since early June after relatively muted recent price action.
The digital currency was trading at $10,196.27 at around 12:31 pm Singapore time, 2.55% higher than 24 hours previously, according to data from Coindesk, CNBC reported.
Bitcoin last crossed $10,000 on June 3 and has since seen a steady decline. But over the last seven days, the leading crypto has risen nearly 11%.
Vijay Ayyar, head of business development at cryptocurrency exchange Luno, said large players were debating whether to sell off their bitcoin to smaller entrants in the market, which could push the price lower and make it more attractive for the bigger traders to buy more of the digital asset.
“This doesn’t seem to have happened,” Ayyar said. “What we have unfolding is potentially re-accumulation by big players, joined by smaller traders in an attempt to push BTC higher past 10K and more past 10.5K, which is the big resistance level, where BTC last put in a high.”
“We still haven’t broken the 10.5K level, if that happens, BTC is probably running to 15K. All signs point to that at this point,” he added.
While bitcoin was higher last week, major Wall Street indices including the S&P 500 were lower. Gold, however, continued to rise and hit a record high on Monday. Gold is seen as a so-called safe-haven asset that investors buy in times of uncertainty.
Bitcoin has sometimes been called “digital gold” with advocates saying it could be a good safe-haven investment. However, bitcoin has tended to trade closer to equity markets in recent times and is known for its huge volatility.
Both equity markets and gold have been supported by recent economic stimulus packages from governments and central banks around the world in a bid to help fight the economic fallout from the coronavirus pandemic. For example, the European Union reached a nearly 2 trillion euro recovery plan last week.
In addition, investors are closely watching the numerous coronavirus vaccines being developed around the world. Recently, Oxford University carried out early-stage human trials with pharmaceutical giant AstraZeneca. The drug produced a promising immune response, according to data published in the medical journal The Lancet.
Ayyar said that bitcoin could benefit from these stimulus measures as well as hopes for a vaccine.
“My view is that with the major governments declaring unprecedented stimulus packages … we will see continued bullish momentum across markets. So that includes equities and gold as well. And BTC and crypto will follow on this regard. Added to the fact that a vaccine seems within reach as well now, no reason to be bearish near term,” Ayyar said.
Predictably, gold bug Peter Schiff expects pulback
Outspoken bitcoin critic Peter Schiff has taken to Twitter to comment on the bitcoin price action taking it above $10,000. Schiff says it is highly likely that bitcoin will plunge this time, as it did three times previously after venturing above the $10,000 level, U.Today reported.
He also invited prominent bitcoin educator Anthony Pompliano on his live show on YouTube to discuss that and talk about gold’s new all-time high as well.
In his tweet, Peter Schiff reminded the audience that since the glorious 2017 rally, bitcoin has reached above the crucial $10,000 level three times so far.
After the first two rises, BTC then plunged 38% and 63%. In May this year, the fall constituted only 15%. Schiff seems to be certain that, this time, bitcoin will not hold above $10,000 for long and asks himself and the audience: How far will bitcoin plunge this time?
In another of his tweets, which came out after the Schiff-Pomp talk on YouTube, the gold bug and Euro Pacific Capital CEO tweeted something he forgot to tell Pomp during the conversation.
According to Schiff, bitcoin, now sitting at $10,200, has a strong overhead resistance that will make its further rise towards $20,000 a hard goal to achieve.
However, the bitcoin critic says, gold (which has exceeded its all-time high of $1,900) does not have this pressure over it.
When Pompliano and Schiff discussed the year-to-date growth of gold and bitcoin, it turned out that XAU had increased in price 27%, whereas bitcoin (“digital gold”) has increased more than 35%, according to Pompliano, who called it a “big boy move.”