Bitcoin (BTC) price is trading around 0.4% lower today as the buyers show signs of exhaustion near the record highs.
Fundamental analysis: Weak supply
A weaker Bitcoin supply might be one of the key drivers behind Bitcoin’s recent rally. Some analysts believe that China’s miners may be selling Bitcoins amid regulatory crackdown on local exchanges.
“The lack of supply has fed extremely well to the trendiness of this rally, without any of the large sell-downs typical of miner activity in the past,” crypto-asset trading firm QCP Capital from Singapore said.
On the other hand, some of the most prominent Bitcoin buyers and investors are hoping that the most recent rally is just a beginning. Mike Novogratz, a prominent Bitcoin investor and the CEO of a cryptocurrency investment firm Galaxy Investment Partners will rise in the future as it is seen as a store of value.
“You can’t buy bitcoin at Citibank or Bank of America, but their strategists are talking about it,” Novogratz said. “We’re seeing institutions buy into this, we’re seeing high net worth families buy into this, across the board you’re getting institutional adoption.”
According to him, the current rally is more sustainable as it is driven by institutional investors who could eventually push the price of the world’s largest digital asset to $60,000 in a year’s time.
Novogratz adds that Bitcoin has “hit escape velocity,” as safe-haven investors see it as a store of value. Moreover, Bitcoin is benefiting from massive stimulus plans deployed around the globe that are diminishing the value of traditional currencies.
Technical analysis: A pullback likely
Bitcoin price recorded the best week in seven months after closing 15.40% higher.
