Over the last two weeks, cryptocurrencies have had a pretty impressive bull run, crossing the $400 billion mark for the first time since early-March. Bitcoin’s price rebounded from the sub-$7,000 bottom to reach a high of $9,760 today. However, as Bitcoin approaches $10,000, signs of resistance appeared.
At the time of writing, Bitcoin has slid by $600 to retreat back to $9,150, bringing its week-long bull run to a halt. Nevertheless, it is still over 35% up from its price earlier this month.
Source: CoinMarketCap
Reasons For Bull Run
Earlier this week, a Thomson Reuters survey found that one in five financial institutions considering cryptocurrency trading in 2018. The survey was conducted among 400+ clients across all of Thomson Reuters trading solutions including Eikon, REDI, and its FX platforms, with approximately 20% of the participants indicating they are considering trading cryptocurrency over the next 3-12 months.
Furthermore, Goldman Sachs also made its first hire in the cryptocurrency markets, according to reports by CNBC on Monday. This is a follow up of the Wall Street banking behemoth’s announcement back in January, which revealed that they are in the early stages of setting up a trading desk dedicated to Bitcoin and other cryptocurrencies. Justin Schmidt, a former trader, was Goldman Sachs first recruit, and he will be heading the digital asset markets in Goldman’s securities division.
Schmidt began his role on April 16.
According to Joe DiPasquale, CEO of BitBull Capital, the aforementioned factors managed to shift the sentiments amongst crypto investors and resulted in an upward trend in crypto prices.
Price Resistance at $10,000
Bitcoin’s price has been steadily increasing ever since last week, surging by nearly $3,000 to brush the $10,000 mark. However, at the last moment, it faltered, dropping by over $600 to threaten the $9,000 support level.
The volatility of Bitcoin’s value, as well as its wild price swings, brings back concerns of Bitcoin being merely a speculative commodity. According to Bill Harris, former CEO of Intuit and founding CEO of PayPal and Personal Capital, the speculative aspect of Bitcoin seems to be overshadowing its practical transactional aspect.
“In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen. In a pump-and-dump game, promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices.”
