Bitcoin holds firm at US$4,990 levels on day 2 of coin surge, experts remain quizzical

A mass surge of buying pressure has pushed the world’s most popular cryptocurrency past many psychological thresholds on Tuesday and the resistance seems to be going strong coming onto Wednesday, with the crypto surging to the highest level since November last year, making crypto fanatics calling the revival the end of the “Crypto Winter”.

At around 3.00pm Singapore time on Wednesday, Bitcoin was trading at US$4,995.62 based on IG data, and briefly peaked a high of US$5,085.79, gaining by 3.04% thus far.

Compared to a day ago, the crypto had peaked at US$5,081.74 and by the end of the day’s session had fetched an increase of 16.72% from the opening price of US$4,137.45, IG data showed.

Prior to the resurgence seen this week, for the past couple of months, the coin had been facing multiple levels of strong resistance at around US$4,200 and US$4,600.

The boost has also pulled many other cryptos to join in the rally, with Bitcoin Cash up by 17.96%, based on IG data.

Has the “Crypto Winter” ended? It’s anyone’s guess

Crypto enthusiasts are now calling the market activity the end of the “Crypto Winter”, after months of bear territory.

CEO of UK-based deVere Group’s chief executive Nigel Green told MarketWatch in a recent interview: ‘I’m now calling that the market has bottomed, and the so-called crypto winter has come to an end. I believe Bitcoin will now move higher over the next few weeks and months, making steady gains for investors.’

Although sudden swings in Bitcoin is not something surprising, but activity for the cryptocurrency has been somewhat lacklustre in recent months as investors are not as enthused about the coin’s ability to gain mainstream adoption in the near term.

Meanwhile, some experts are attributing the surge to an April Fool’s joke from an online news site claiming that the United States Securities and Exchange Commission had approved Bitcoin exchange-traded funds. These views from experts further illustrate the lack of confidence in the token as well as it being retail-driven based solely on the fear of missing out.

Even Zhao Changpeng, the chief executive of crypto-exchange firm Binance tweeted on being ‘honestly clueless’ about the trigger to the surge.

According to Julien Auchecorne, London-based chief operating officer at XBTO International, the bounce is not enough to reset the crypto winter as ‘we have no new major products’ and last year’s big breaks are still ‘in their nascent stage’, he told Bloomberg.

Three-month high a reprieve from a bearish 2018 led by regulatory clampdowns, crypto-exchange thefts

However, if you compare the resurgence of Bitcoin on Tuesday with the all-time high record price of US$19,783.06 on December 17, 2017, the crypto has fallen by around 75%. Many retail investors who have bought in on the crypto during the peak have gotten quite a discount from its value after it slid like a falling knife in 2018.

As the coin is mainly sentiment-driven, the regulatory opinion from some central banks on cryptocurrencies not being adoptive for mainstream use in the near term was also a reason to the slide seen last year.

The hacking of crypto-exchanges, including the notorious theft of US$530 million worth of cryptos stolen from Japanese exchange Coincheck also led to a great damage to the reputation of cryptocurrencies.

In November last year, the downward slide for crypto ensued as investors exited risker assets and products amid trade conflicts and geopolitical issues including Brexit as the uncertainties reflected a cloudy outlook going into 2019.

Bitcoin saw a sharp selloff on November 20, 2018 in under 24 hours, with the coin plunging lower by 17.58% to US$4,695.97. The losses had extended from a day earlier as the crypto could not find its support at US$5,600.

Back then, experts said it may be possible for the crypto to soon find its bottom.