Bitcoin grows steadily to eye $10,000 after best month of 2018
The $10,000 psychological barrier has been crossed many times before, and bitcoin's not out of the woods yet.
Bitcoin rose 33% against the US dollar in April, making it the best month for the coin in 2018. With most of the year given over to an ongoing slump it's not the highest bar, but it's a potentially meaningful one.
Since the start of the year, bitcoin has been trading in increasingly narrow bands and has seen relatively consistent declines in volatility. Despite being occasionally hit with bigger and more abrupt swings in both directions, volatility has noticeably trended downwards since the start of the year. It has seen 43 instances of daily swings of US$1,000 or above, but half of them were in January alone. The price rise last month didn't seem to have much effect on daily volatility, and it has spent the last week at daily swings of about $500 or less.
This is stagnant by bitcoin standards, but the prices don't seem to mind and have in fact been trending upwards relatively gently and sensibly compared to the norm.
Some might see this as a signal of a maturing market, now bordered with CFDs on either side, while others are expecting the volatility to return, probably pushing prices sharply upwards.
As it stands, bitcoin's comparatively sensible growth, rather than the out of control bull run of other times, may have some expecting a break of $10,000 in the near future.
But in itself, this might put a stopper on bitcoin. Metrics like the buy/sell ratios of cryptocurrency markets are showing that it's stretching increasingly thinly as prices rise. Plus, as high as prices might seem right now, they are still broadly lower than they were after the initial February recovery, across bitcoin and most other coins.
There's still a lot of paranoia out there though, and the recent bloodbath is still fresh in most people's minds. Despite its sensible footprints, the crypto markets might be more fragile than they seem at the moment. There's a decent chance that the psychological $10,000 barrier will be accompanied by a sell wave, and it's not clear whether the market is able to absorb it. However, it is clear that people won't hesitate to drop their stacks if it looks like another bloodbath is coming.
The relative stability suggests genuine demand in the market, but fears might flare if and when bitcoin hits $10,000 again.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO
Latest cryptocurrency news
- Ethereum price: Experts believe key indicators paint a negative picture
- China’s aggression to Bitcoin has lead to it’s worst month in years
- Bitcoin’s better half: Growing number of Australian women investing in crypto
- Ethereum price continues to slide, correcting by 9% overnight
- Bitcoin price drops 5% overnight as usage weakens
Picture: Shutterstock
