The first cryptocurrency returned to the level it traded in mid-May. Is the asset capable of continuing its rapid growth in the coming months and renewing its all-time high
On October 6, the bitcoin rate rose sharply to $ 55.5 thousand. The last time such a high rate was recorded in May this year. During the day, the first cryptocurrency rose in price by 7%, and its capitalization exceeded $ 1 trillion. Topplabs.org experts explained why the value of bitcoin has skyrocketed and how this could affect the digital asset market.
Large holders accumulate
The sharp rise in quotations on October 6 was triggered by fundamental rather than news factors, says Andrey Podolyan, CEO of the Cryptorg crypto exchange. According to him, the growth of bitcoin to $ 55.5 thousand was caused by the long accumulation of cryptocurrency by large investors, who took advantage of the decline in quotations in the summer and in September for large purchases.
“A lot of small players sold in panic, and the funds bought bitcoin from them at that time,” the expert noted.
Podolyan's words are confirmed by the head of the CryptoQuant analytical company Ki Yong Joo. He reported that large holders, during the growth of bitcoin to $ 55.5 thousand, bought a cryptocurrency for $ 1.6 billion in 5 minutes.
Further growth
The breakthrough by bitcoin of an important psychological mark of $ 55 thousand may mean the beginning of a new round of growth – up to $ 58-60 thousand in the short term, predicted the head of the analytical department of AMarkets Artem Deev. He attributed the sharp rise in the first cryptocurrency to the transition of investors from traditional markets to cryptocurrency in search of defensive assets.
“Investors are looking for ways to invest and make a profit. This pushes the cost of cryptocurrencies up, ”added Deev.
The dynamics of bitcoin shows that the coin can update its all-time high in the current year, says lead analyst at 8848 Invest Viktor Pershikov. According to him, the more the first cryptocurrency becomes more expensive, the more new retail buyers will appear, thanks to which large market participants will be able to gradually exit positions without strong drawdowns of the asset.
“Institutional investors will partially fix profits after bitcoin renews its historical high, which will cause a correction in the region of $ 66-70 thousand,” the analyst said.
Due to the fact that large investors begin to fix positions, the value of bitcoin may stop growing after the renewal of the historical maximum, Pershikov said.
Altcoin dynamics
One should not expect that after the sharp movement of bitcoin to $ 55 thousand, altcoins will show similar growth, Podolyan said. Now investors are reluctant to invest in alternative coins, as they are looking for more stable assets, Deev explained.
“Bitcoin is gradually becoming more stable, and against its background, altcoins are perceived as more risky investments, which explains the lack of their growth,” the analyst added.