Forbes: Bitcoin's rebound this year is more sustainable than in 2019

Forbes published an article on Thursday saying that the rebound of Bitcoin, the cryptocurrency with the largest market value, this year is more sustainable than the rise in the first half of 2019.

The report said that in the first half of 2019, the price of Bitcoin rose sharply, but then fell sharply in the second half. In the first two months of 2020, the price of Bitcoin rose by 50%, and some investors were worried that this would repeat the mistakes of 2019. However, cryptocurrency analyst Tone Vays said that the price trend of the crypto market this year looks different from last year.

Vays said, "I do see more individual investor interest driving the current rise in Bitcoin prices. Although the rise is a little slower, it is more orderly than the last time."

Regarding the crypto market in 2019, Vays believes that the rise in the first half of the year and the plunge in the second half of the year are related to the PlusToken Ponzi scheme. In addition, he believes that many investors exchanged their altcoins for Bitcoin in 2019, which boosted the price of Bitcoin and also increased Bitcoin's dominance in the crypto market from around 50% at the beginning of last year to around 70% at the end of the year.

Vays said, "The money that was moved out of altcoins is basically money that was already in the crypto market." Therefore, Bitcoin's rebound is not new money entering the market. He explained, "If 10% or 15% of Ethereum was converted into Bitcoin, it would greatly increase the price of Bitcoin because the liquidity in the cryptocurrency field is very low."

Regarding the trend of the crypto market this year, Vays believes that “this year, we are closer to the Bitcoin block reward halving, so there is hype in the cryptocurrency field.” Bitcoin’s block reward halving is expected to take place in May 2020.

Willy Woo, a blockchain analyst, said that cryptocurrency derivatives trading played a role in Bitcoin's 2019 price rise from $4,000 to $13,000. Woo believes that "the 2019 rally was extreme and was driven by derivatives trading on futures exchanges because most individual traders were in short positions and it was profitable to squeeze them out of the trade. Bitcoin's price surged at that time, but it was not sustainable."

Derivatives trading has become more common since 2017. Several mainstream exchanges have also launched crypto derivatives trading platforms. Woo said that in contrast to 2019, Bitcoin's price trend this year is different, as the price of Bitcoin has risen due to an increase in buyers. Woo mentioned that "investors poured in at the bottom of $6,000 in 2020. The growth in 2020 is determined by long-term investor activity, which is organic demand, which is more sustainable."

According to Bitpush data, Bitcoin is currently facing strong resistance above $10,000, and has fallen back twice in a row after breaking through $10,000 in recent times.

Image source: pixabay

AuthorXiu MU

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