Bitcoin rally continues at the beginning of the week with the world’s largest cryptocurrency rising by 1% to 5,203 USD. The market is getting hotter and bull predominate, but still, there is uncertainty if it will climb to the key threshold of 6,000 USD. However, recently the Bitcoin rose to year-to-date high and the trend is generally up.
The major driver for the increase of the Bitcoin is the second largest cryptocurrency, Ethereum, which rose by 5.7% to 177.66 USD. The news that Tron founder and CEO Justin Sun thinks the Tron ecosystem will “officially collaborate” with Ethereum (ETH) this year, pushed the prices up.
More precisely, Sun said that he thinks “even within this year we will see Tron even collaborate, officially collaborate, with Ethereum”. In response to a question on Ethereum co-founder Vitalik Buterin’s recent tweets about Tron, Sun stated that he thinks “competition brings a better product”.
However, the optimism from the top two cryptos did not extend to other virtual money. XRP and Litecoin are down by 2.2% and 5.0%, while Bitcoin Cash wiped out 5.6% of its value.
However, the total cryptocurrency market value rose to 180.151 billion USD.
How long Bitcoin will stay above 5,000 USD?
It is no longer a news story that last week there was an unexpected, rather shocking, jump in Bitcoin price to over 5,000 USD. Thus, the Bitcoin rose to year-to-date high and raised optimism in the crypto community.
This jump hit other tokens as their values also increased significantly. The news came with a lot of excitement for investors and supporters of the cryptocurrency.
However, a recent analysis seems to predict a change in the market and encourages people to be ready for it. According to insiders from the sector, three purchases of 7,000 BTC were the catalyst for the latest price jump. This was 0.1% of the total offering, currently bought.
It should be noted that for 416 days, the number of Bitcoin created every 24 hours is reduced by half. Thus, per year will be created 328,500 Bitcoin.
The speculation pumped the price of the Bitcoin, but the jump will not be significant and sustainable, as demand is not expected to change. However, the speculations may pump the price again recently.
There are many reports confirming that an unprecedented amount of BTC has been purchased at the same time. The whales surprisingly shifted these huge amounts – which is 0.1% of the total available Bitcoin – from some major exchanges to unknown portfolios.
This is a significant crypto dump, which affected the prices and caused increase and optimism among investors. Nevertheless, it is necessary to consider the likely effects as at some point, these crypto whales will think to cash out their profits and this will definitely cause the opposite effect.
And this may cause a collapse of the price to even year-to-date lows.
Bitcoin price analysis
Bitcoin continued with the upside during the just concluded weekend trading sessions. There was a break above 5,200 USD and the cryptocurrency extended the gains towards last week’s high around 5,343 USD. However, an ongoing bearish momentum currently risks sliding below the trendline support.
The failure to correct above last week’s high resulted in the formation of a double-top pattern that currently paving the way for a bearish reaction. The bulls must defend the short-term support at 5,200 USD to avoid declines that could refresh the levels close to 5,000 USD.
If the bulls are able to defend 5,200 USD support in the short-term, we can then expect the cryptocurrency to stay in a range below the limit at 5,343 USD. However, if losses the support the cryptocurrency will fall down towards 5,000 USD, 4,800 USD and 4,000 USD, which are the key support zones.