Cryptocurrency expert and trader Brian Kelly said he thinks the BTC could face a new bull run this year after reaching a market bottom. Bitcoin soared by as much as 20 percent on the Luxembourg-based Bitstamp exchange to reach the $5,000 mark on Tuesday. In just 24 hours, bitcoin had added more than $14 billion to its market value, according to CoinMarketCap.
Speaking on CNBC, Mr Kelly said: “I think it is certainly much better to have it up 20 percent than down 20 percent or more like we were in 2018. But I do think the sentiment has shifted here.
“All indications we have, whether it be fundamental, technical or quantitative analysis we do all suggests that we probably have at least started to put in the bottoming process.
“If you look back at past cycles, they look very similar to this. You have that kind of one last flush out and then the market starts to trade higher.
“What’s interesting about this move is it is happening on improving fundamentals and improving institutional sentiment.”
Bitcoin price was at $5,156.50 at 9.09pm (BST) on Wednesday, according to CoinDesk. It saw its highest value before Christmas when it reached the monumental price of just under $20,000.
Mr Kelly said he thinks the $6,000 to $6,500 range is the new resistance level for the cryptocurrency.
Speaking about where the bitcoin price is headed, Mr Kelly said: “Probably a reasonable target is close to $6,000 for this move.”
Analysts have been stumped by the jump with it not being immediately clear what was behind the rally in virtual currency prices.
Mati Greenspan, a senior market analyst at trading platform eToro, told CNBC analysts have been predicting a breakout from the resistance level of $4,200.
He said: “Bitcoin’s break above $4,200 this morning was critical, as the market had been watching that level for a while.
“No doubt some entry orders and stop losses were grouped right above.”
But the some analysts believe the sudden price rise is a temporary move for the cryptocurrency.
Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital, told Bloomberg: “The bitcoin market and cryptocurrency market in general continues to be small relative to the rest of the markets and emotional.
“It’s still very much subject to waves of enthusiasm. I don’t think today is anything special other than a temporary enthusiasm.”
Bitcoin Market Price Chart in RealTime