After recording a rebound from $6,500 to $7,000 on April 2, the price of bitcoin has surged 6 percent again today, on April 4, as the entire cryptocurrency market recorded a daily gain of $10 billion.
While several smaller cryptocurrencies like Steem and VeChain have outperformed bitcoin with a 50% and 25% increase in value, major cryptocurrencies including bitcoin, Ethereum, Ripple, Bitcoin Cash, Litecoin, and EOS have performed generally well over the past few days.
Since March 30, for about 4 days, bitcoin has not been able to surpass the $7,350 mark, due to low volumes and lack of demand on most major cryptocurrencies. Over the past 12 hours, buy volumes have spiked on Bitfinex, Binance, and other trading platforms, as seen below in the bitcoin 30-minute candle chart.
On March 25, the price of bitcoin achieved $9,000, with relatively strong volumes on both the bitcoin futures market and cryptocurrency exchanges. However, since then, bitcoin has been on a continuous decline. Bitcoin tested several levels, including $8,800 and $8,000, but failed to sustain momentum and dropped to $6,400.
Over the next few days, if bitcoin can sustain its volume and surpass the $7,500 margin, it is likely that bitcoin could make a move back to the $8,000 region, moving to where it was five days ago. Its entrance to the $8,000 region could lead bitcoin to prepare for a strong rally.
Currently, the the Relative Strength Index (RSI) of bitcoin is at 39.2, which is at a neutral level. Previously, the RSI of bitcoin was at 30, signifying oversold conditions. At the time of reporting, bitcoin is being traded in a neutral zone, and the cryptocurrency has not demonstrated overwhelming demand or sell volumes.
Consequently, the next few days could be an important short-term period for bitcoin, as it has increased by more than $700 over the past 48 hours, and it is starting to gain some momentum, according to bitcoin’s moving average convergence divergence (MACD).
Jon Matonis, a well recognized investor, co-founder at Bitcoin Foundation, and an executive at VISA, stated that in the mid-term, the entrance of financial institutions like Goldman Sachs could lead to a surge in demand towards bitcoin. If the dominant cryptocurrency can recover from its current bear cycle, analysts like Matonis predict a bull run for bitcoin later this year.
“I think it’s fabulous that they’re getting into it because it brings in new liquidity. They’re going to develop futures markets, options markets, I even think you’re going to start to see interest rate markets around bitcoin. We’re used to hearing things about Libor, the index for bitcoin interest rates is Bibor,” said Matonis.