New York: Bitcoin hit its highest level since mid-May and continues to build momentum.
The largest cryptocurrency gained Sunday for an 11th day in the past 12 and traded up to $42,606, its highest since May 18. Market watchers have pointed to $40,000 as an important inflection point. It was up about 0.5 per cent at $41,739 as of 6:13 a.m. New York time on Sunday.
“A run like this certainly suggests some flow backing,” said Jonathan Cheesman, head of over-the-counter and institutional sales at crypto derivatives exchange FTX. “Of course, it now needs to stabilize here - and above the high from May 20 would be further confirmation.” Bitcoin traded as high as $42,541 on May 20.
Bitcoin, which for weeks trended downward from its mid-April record near $65,000, has now spent more than a week building back as supportive comments from Elon Musk and Cathie Wood helped bump it out of a declining trend. Digital-asset-related job postings by Amazon and resulting speculation helped as well.
Edward Moya, senior market analyst for North America at Oanda Corp. a offered a note of caution about the recent run.
“Retail interest is strong, while institutional interest is somewhat lagging and needing fresh endorsements,” he said in a note on Friday. “Bitcoin volatility might remain elevated over the weekend and traders should not be surprised if a spike occurs toward the $42,000 level during some illiquid times.”
Still, the cryptocurrency has risen over the past week back above its 50- and 100-day moving averages, with the 200-day at about $44,700 in sight.
“It won’t be surprising to see Bitcoin expand the $30,000 to $42,000 trading range on the upside and attempt $45,000,” Pankaj Balani, CEO of crypto derivatives exchange Delta Exchange, said in a note July 27.
“However, breaking above $50,000 will take some doing for Bitcoin. Only a conclusive break above $50,000 would attract fresh flows and signal a change in the broader direction for the market.”