Bitcoin Market Heats Up --Will the Price Rally Continue?

After a dramatic drop in March this year, Bitcoin’s price surged quickly from around USD 4000 to more than USD 19000, the highest level since 2017. It left a big question to us: will the increasing trend continue, or should we risk-off at this critical moment?

Last month, Paypal started offering cryptocurrency services including Bitcoin, and also bought up to 70% of all the newly mined bitcoin. More than 300 million active users of Paypal are able to transact bitcoin and other digital assets using their Paypal accounts. Bitcoin prices rose alongside the Paypal news, spiking USD 12,000 at the time, with a strong bullish momentum ever since.

Moreover, southeast Asia’s biggest bank DBS is going to set up an exchange for digital assets that provide tokenisation, trading and custody services to institutional and accredited investors. Bitcoin, being the biggest and original cryptocurrency, soared to a record $19,918 earlier this month, buoyed by demand from investors who variously view the virtual currency as a “risk-on” asset. Other large banks, for instances BBVA, Standard Charted and State Bank of India, are also going to join this cryptocurrency battle. In long-term, the demand of cryptocurrency is predicted to be higher, leading to an optimistic long-term prospect for Bitcoin.

However, for the short-term trend, according to analysts from Bloomberg, a risk-off decline like 2020 Q1 might return Bitcoin towards the $10,000 support level in 2021 despite the path of least resistance remains higher. The short-term investment in Bitcoin is still risky as the bullish momentum may decline gradually. Although Bloomberg analysts have predicted a price target of $50,000 for Bitcoin with $1 trillion market cap for the cryptocurrency, the Bitcoin investors still need to embrace price volatility and risk.