Since June 10, bitcoin has been on a strong upside movement supplemented with large volume across major crypto markets.
The bitcoin price is up by more than $1,300 in the past week (source: coinmarketcap.com)
On Friday, the bitcoin price hit $9,800 on leading exchanges in the likes of Coinbase, Binance, and Bitstamp, achieving a new 2019 high following a 162 percent year-to-date gain against the U.S. dollar.
As the bitcoin price nears the so-called “FOMO” level at $10,000, which has been considered as a psychological level by many investors in the crypto market, investors anticipate the momentum of the asset to strengthen in the near term.
How would bitcoin move after breaching the fomo level?
Fundstrat co-founder Thomas Lee has emphasized that bitcoin has historically seen extended periods of upside movement when it surpasses above the FOMO level.
Lee said that $10,000 is the current FOMO level for the dominant crypto asset and if it surges above that level in the foreseeable future, a 200 to 400 percent rally may be possible based on its performance over the past three years.
“In most markets, a ‘new high’ is needed to confirm a breakout But with bitcoin, when it trades at a price seen only 3% of its history, this has confirmed a new high imminent. This makes crypto different. This ‘3%’ is $10,000. FOMO = $10,000. Currently $250 away from FOMO,” he explained.
Tyler Winklevoss, who owns approximately 1 percent of the entire supply of bitcoin alongside Cameron Winklevoss, similarly stated that if bitcoin breaks above $10,000, a rise to $15,000 is expected.
“If bitcoin breaks 10k, you can bet it’s going to break 15k,” said Winklevoss.
As it was in the 2017 bull market, bitcoin and the rest of the crypto market are seeing an increase in mainstream media coverage as major crypto assets record large gains against the U.S. dollar.
With the entrance of Facebook and other major conglomerates in the likes Visa, Mastercard, Uber, Lyft, and Booking Holdings into the crypto market with a cryptocurrency called Libra, the interest of investors in the crypto market has begun to increase.
Brad Garlinghouse, the CEO of Ripple, a company that oversees the development of the Ripple blockchain network that utilizes XRP as a native crypto asset, said this week has been a record week for the company in terms of contract signings in light of Facebook’s emergence.
Garlinghouse said at a conference hosted by Fortune:
This week will probably be the best week for signing contracts at Ripple ever. It has been a massive call to action because it Facebook kind of came out and said ‘we don’t need Western Union’ anymore. Well, if you are a bank, you are a Western Union, you kind of go ‘huh, that’s interesting’ and I think the banks realize if Facebook is going to be a competitor in the space, they can’t depend on a technology like Swift.
Although the crypto community is divided on the long term impact of Libra on the sector, the general sentiment around the trend of the market has noticeably improved since the release of Libra.
Will alternative cryptocurrencies recover
Possibly due to the announcement of Libra and the decline in the confidence of alternative crypto assets, the market has seen decoupling in recent weeks with bitcoin and ether, the native cryptocurrency of Ethereum, outperforming the rest of the market.
With the exception of some tokens such as Binance Coin and private cryptocurrencies including Monero, most alternative cryptocurrencies have performed poorly against bitcoin.
It remains to be seen whether the rally of bitcoin would trigger alternative cryptocurrencies to rebound similar to 2017 or if investors would remain confident on major assets, expressing concerns regarding the long term survivability of small digital assets.
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