Cryptocurrency is once again a hot topic as social media giant Facebook gets set to launch its own digital coin and the price of bitcoin surges to new highs for the year. This could be the start of another great run by bitcoin, according to technical analyst Keith Richards of ValueTrend Wealth Management, who says bitcoin’s chart is looking good.
“Bitcoin’s [one-year chart] has a nice rounded bottom and there is a breakout,” said Richards, president and chief portfolio manager at ValueTrend, to BNN Bloomberg Thursday.
“On the five-year picture, what you’re going to see is that it peaked and then it fell but now we’ve put in the bottom. How high can it go? That’s really hard to say,” he says. Bitcoin’s price has been climbing steadily over the past couple of months, with the currency shooting past the $9,000 mark last weekend and rising to $9,800 as of early Friday trading —that’s a long way from the $3,400 it was worth at the beginning of the year. (All figures in US dollars.)
A revved up bitcoin stems in part from soon-to-be changes in the cryptocurrency mining world which could drastically reduce the number of coins available for mining, but also a factor is Facebook, which recently announced plans to launch Libra, a digital currency that reportedly already has the backing of companies like Uber, Spotify and Visa, all ready to embrace Facebook’s fintech offering.
“We aspire to make it easy for everyone to send and receive money just like you use our apps to instantly share messages and photos,” said Facebook CEO Mark Zuckerberg in a post this week. “This is especially important for people who don’t have access to traditional banks or financial services. Right now, there are around a billion people who don’t have a bank account but do have a mobile phone.”
Another indication that cryptocurrencies may be on the rise, Chinese bitcoin mining company Bitmain is reportedly considering a US listing later this year, which comes after the company cancelled an Hong Kong IPO application earlier this year. Richards says that by its chart, at least, bitcoin doesn’t have much blocking its path once it gets past the $10K mark.
“There are going to be different resistance points which it’s probably testing right now at around $9500. If it can break through that there’ll be a final resistance point at about $10,000 and it it breaks through that then, sure, it can get to all-time highs,” Richards says.