Bitcoin (BTC) price has recorded the best start to the year since 2012 as it has gained 20% since the year started. Other major altcoins are up as well with the entire cryptocurrency market gaining 23% in value.
“The Iran uncertainty combined with the positive launch of CME Bitcoin Options were strong catalysts driving an eruption in bitcoin and even adding heat to the struggling top 100 alt coins,” said Jehan Chu, co-founder of Kenetic Capital.
“While sentiment still drives waves of volatility, we are seeing increasing institutional volume anchoring the market,” he added.
A better-than-expected start to the year has prompted certain analysts to believe that Bitcoin may hit levels around $15,000 or $16,000 this year. For Vijay Ayyar, head of Asia for cryptocurrency exchange Luno, this is a “reasonable target”.
“When the price starts running, the masses will come in as we’ve seen before. This [the halving] is slated to happen in May 2020. So any price increase as we’re seeing, people have an eye on May for sure,” Ayyar told CNBC.
What Ayyar is referring to is the Bitcoin halving, which is expected to take place in May this year. It is an event which halves the rate at which new Bitcoins are created. The Bitcoin halving occurs every four years.
Hence, producing new coins will get more difficult as of May as Bitcoin miners will start receiving 50% less Bitcoints for verifying transactions. Currently, miners receive 12.5 BTC for each block, a number which will be cut in half again, to 6.25 new BTC.
Technical analysis: Broken channel paves the way for extra gains
From the technical perspective, Bitcoin has broken the channel resistance (the purple resistance lines), which now opens the road for, potentially, more substantial gains. For this to happen, the Bitcoin bulls would first have to clear the major resistance zone around $9,000.
The price action came close to testing this zone yesterday, but rotated lower before it actually tagged the $9,000 handle. It is an important area since it hosts four different levels of resistance. Hence, a clean move above $9,500, and a daily close, should provide a major boost for Bitcoin bulls.
The mid-term outlook for Bitcoin sees a 2019 high of $13,890 as a key target for the bulls. In general, any substantial move above $9,500 will likely result in new investors jumping in to buy Bitcoin. Finally, the area around the $16,000 target holds two important Fibonacci-related resistance levels.
Bitcoin halving is a widely-anticipated event, which is expected to provide a fresh boost to Bitcoin prices. Technically, the bulls are targeting three key areas in the mid-term: the $9,000, $13,880, and $16,000.