Bitcoin, after an anticlimactic supply squeeze earlier this week, has suddenly leaped toward $10,000.
The bitcoin price is up around 5% on the last 24-hour trading period and is still climbing—hitting $9,345 per bitcoin on the Luxembourg-based Bitstamp exchange.
On Monday, the number of bitcoin rewarded to those that maintain the bitcoin network, called miners, was cut by half—dropping from 12.5 bitcoin to 6.25.
In the short term, the bitcoin price is widely-expected to be highly volatile as bitcoin miners try to balance the price with their running costs.
Many bitcoin traders and investors had warned the bitcoin price could crash in the aftermath of the halving—but those fears have yet to materialize.
Despite warning of a post-halving drop most bitcoin analysts are confident the price will climb eventually, with many forecasting bitcoin will retest its all-time highs.
“In my view, $10,000 to $10,300 per bitcoin is a significant resistance area,” eToro analyst Simon Peters said, pointing to data from blockchain analytics firm Glassnode that shows bitcoin investors stopped buying bitcoin as the price rose over $10,000, “indicating decreasing confidence in prices at that level.”
“Bitcoin has struggled to pass it on numerous occasions since the drop in September 2019. It could be that if we do see bitcoin hit $10,000 again, it will be followed by another short retracement like Sunday’s, and prices staying in below for a few months or so.”
The bitcoin price crashed over 10% on Sunday ahead of bitcoin’s third halving, spooking many bitcoin traders and investors.
However, Peters expects bitcoin to see a new all-time high within 18 months, “in the $20,000 to $50,000 per bitcoin region.”
Meanwhile, bitcoin bulls have cheered support from some high profile investors who aren’t happy with the Federal Reserve and other central banks.
The bitcoin and cryptocurrency market was set alight last week by news legendary macro investor Paul Tudor Jones is buying bitcoin as a hedge against the inflation he sees coming as a result of unprecedented coronavirus and lockdown-induced central bank money-printing.
Chamath Palihapitiya, the chief executive of Social Capital and Virgin Galactic chairman, has warned the Fed is creating a “deflationary cycle” by pumping trillions of dollars of cheap cash into the system.
“Now all of a sudden even [Paul Tudor Jones] is looking at bitcoin and the reason is because we are in this massive deflationary cycle,” Palihapitiya told CNBC this week.
“I still struggle to find anything that is as uncorrelated to anything and to everything else than bitcoin.”