Crypto analysts and investors have established the $8,800 resistance level as a short-term target for Bitcoin, based on the optimistic technical indicators of the dominant cryptocurrency.
Bitcoin Rally Ahead?
Most of the predictions on the short-term rally of Bitcoin originated from data provided by RIG trend lines — an indicator that combines the Relative Strength Index (RSI) and momentum studies. The RSI is intended to chart the current and historical strength or weakness of an asset based on the closing prices of a recent trading period.
The momentum gauge crossed the RSI, which likely indicates a positive price movement is imminent. Considering past instances, it’s worth noting that the last three times that these two gauges crossed this year Bitcoin’s price subsequently rose. When these two gauges crossed in mid-August, the cryptocurrency’s price rose by 21% over the next few weeks, according to Bloomberg.
The signs were first seen last week when Bitcoin lingered above a price and trend line which flashed a positive signal that typically forecasts future price moves. Looking back, since February the digital currency has tested levels near $6,000 five times, bouncing back each time. But, as noted above, the last few times that RIG trend lines were charted as they were today, the Bitcoin rallied.
Cryptocurrencies generally have have been trading lower most of this year due to factors like increased regulatory scrutiny, an uptick in government crackdowns, and fears that the mainstream adoption of digital currencies might take longer than some had anticipated.
Just last month the SEC dismissed requests to list nine cryptocurrency funds, citing continued concerns about manipulation, among other things. In addition, according to some analysts, the rise of investments in marijuana stocks has taken some attention away from Bitcoin and other cryptocurrencies.
All the while, last week, famed billionaire investor and founder of Galaxy Digital LP Mike Novogratz said the bottom was here. Novogratz, who has famously claimed to have 20% of his net worth in cryptocurrencies, stated that there are still key levels, like $8,800 and $10,000 for instance, that Bitcoin will need to breach before really moving out of this bear market.
According to Novogratz, once Bitcoin passes the aforementioned price levels — which are important in terms of their technical, fundamental, and physiological values— and we continue to see an influx of institutional investment, “the sky’s the limit.”
Moving forward, he added that Bitcoin could reach as high as $ 50,000 by the end of this year. If that happens, the current price of Bitcoin (sitting below $9,00o) would see a more than fivefold increase.