With Bitcoin’s price continuing to increase and even more public places adopting the cryptocurrency, it is becoming clearer and clearer that BTC is here to stay. The only question left to ask now is how high the price will go. So, what do the technical indicators say?
In a move that would have been inconceivable just a few weeks ago, Bitcoin has seen its value increase again this week by 12%. As of right now, BTC’s market cap stands at $70 billion with six exchanges accounting for over $12 billion worth of trading volume in just the past 24 hours.
Bitcoin’s price is also steadily rising
The last time BTC saw such an increase was back in November of last year when it increased by 50% over a period of 2 weeks. Since then, Bitcoin’s price has mostly stabilized, but this past month has been a big one for the currency. From August 17 to August 24, BTC skyrocketed to $4980 before retreating back down to $4691 almost immediately afterwards. The massive increase came after the U.S Securities and Exchange Commission (SEC) announced that it would be reconsidering its decision from earlier this year not to approve a Bitcoin ETF by the investment firm VanEck.
Furthermore, Bitcoin’s price has been moving along a stable and predictable line. According to the popular cryptocurrency exchange Bitfinex, Bitcoin’s price is currently hovering around $6400, with 66% of the total trading volume coming from South Korea. The currency’s price comes in at 0.03 BTC per USD right now with an overall market cap of $75 billion.
This increase in asset values worldwide is having a major influence on the general cryptocurrency community as well. For example, the Ethereum Price Index (EPI) reached $400 this week for the first time since May and is now going through its sixth straight weekly increase.
Bitcoin(BTC) is undervalued at the moment.
The technical indicators point to a possibility of more upward movement in BTC’s price. The most recent study conducted by the popular trading platform TradingView shows that Bitcoin is not overvalued at the moment. In fact, the BTC/USD chart is showing signs that Bitcoin’s price could potentially continue to increase for at least another month.
The study was conducted by Craig Erlam of Oanda and was featured on CNBC as well as a number of other prominent news sites on August 23rd. According to Erlam, there are two factors that indicate whether or not an asset is undervalued: the long-term trend line and a shorter-term moving average line. When those two lines cross each other again, it indicates that the asset is undervalued.
Is Bitcoin’s price going to continue to increase?
The long-term trend line of BTC’s price shows that it has been on a steady decline since the middle of 2015, but last week’s performance has shown that Bitcoin is no longer declining: its value has stabilized, and it hasn’t retreated back down to its original point. This is the first time BTC has been on such a level for about two years. However, with over $12 billion worth of trading volume in just the past 24 hours, cryptocurrency as a whole is definitely not overvalued either.
Furthermore, Erlam confirms that this occurrence could be a sign that there will be more positive moves in BTC’s price within the near future.
Bitcoin’s price may be rising as a result of ETFs, however, this will not necessarily increase BTC’s value.
The most popular Bitcoin ETF that is scheduled to be approved by the SEC is Bitwise, while VanEck has their own version. If either of them were to be approved by the SEC, it would allow Wall Street professionals and others to once again use BTC as an investment vehicle like they were able to do in 2013 before Wall Street started getting concerned about regulation. According to Erlam, this could lead to a 60% increase in Bitcoin’s price for the short term:
“The move back up was notable for it suggesting that more positive returns are possible.
