Bitcoin has been having the run of a lifetime in recent months, nearly doubling its price in the past two months. The cryptocurrency shot up to a high of $19,297 (Kshs. 2.1 million) on November 24, its highest price since the 2017 bull run. This surge to the dizzying heights has left many in Kenya and beyond with one question – is it time to buy Bitcoin?
The top cryptocurrency gained global recognition in 2017 when it shot up from $850 in January to its all-time high of $19,961 in December. This rise was marked by excitement from investors as they sought to jump in before it’s too late.
However, in January 2018, the price started correcting and eventually dropped 84% to $3,276 by the end of the year.
Bitcoin has been on a similar parabolic rise to the top this year. In recent months, it has been feeding on FOMO (fear of missing out) from investors, pushing its price higher by the day. While it corrected slightly by 11% to trade at $16,890 at press time, it’s still up by more than 26% in the past 30 days.
While it’s impossible to predict what the price of Bitcoin (or any other asset) will be tomorrow, there are some factors that can offer insight. One of them is the amount of Bitcoin moving to, and stored in cryptocurrency exchanges. The more Bitcoin moves to exchanges, the more likely that it will be sold off and thus lead to a price drop.
According to data from blockchain analytics firm Glassnode, the amount of BTC held in exchanges is at its lowest level since August 2018. This is a bullish signal, indicating that most Bitcoin holders have withdrawn their funds to their personal Bitcoin wallets and are not looking to sell.
Bitcoin analysts and trading experts have backed the cryptocurrency to shoot past the $20,000 fairly soon. Despite the correction in the past 24 hours, they believe BTC will get back on the bullish cycle.
Ki Young Ju, the founder of cryptocurrency analytics firm CryptoQuant told CoinDesk:
“I think this is a correction before we break $20,000. Other long-term on-chain indicators like BTC and stablecoin reserve say the potential buying pressure still prevails so far.”
Mati Greenspan, the former senior market analyst and eToro and one of the leading Bitcoin analysts shares a similar opinion. He believes that the recent price drop was insignificant and is unlikely to continue.
Siddharth Menon, the COO of Indian cryptocurrency exchange WazirX also believes we are yet to see Bitcoin at its peak. He revealed that most traders have been taking positions in Bitcoin in recent days. These traders have been adding funds whether the price goes up or down, he stated.
Kenyan Wall Street