The cryptocurrency market added $20 billion in the span of a half an hour after Bitcoin broke the $7,000 barrier. It’s currently trading at $7,340 according to CoinMarketCap, with a possibility of climbing back up to $8,000. There may be a number of factors that should be considered moving forward. We are not financial advisors, so be sure to speak with an investment professional if you are thinking of making any major financial decisions.
Occam’s Razor is the principle that the simplest solution tends to be the correct solution. In the case of Bitcoin, $7,000 was a resistance level that has been tested for the past month, since Bitcoin fell from over $7,600 in early June to the $6,500 range on June 13. When it did finally break out, it continued to surge to its current level, where it is currently building support, potentially for another rally to $8,000 and beyond. Were there other factors at play? There are two pieces of news that may have nudged Bitcoin past the $7,000 mark.
Over the weekend, news broke that confirmed a blockchain division at BlackRock. Though company executives deny that their clients have expressed interest in crypto investments, the evidence is to the contrary, and people are speculating that the ETF giant is planning a big move in the near future.
Besides BlackRock, Goldman Sachs announced the appointment of David Solomon as its new CEO. A veteran at the company, Solomon previously served as President and Co-COO. In those roles, he developed a reputation as a Bitcoin bull, compared to the somewhat skeptical outlook of his predecessor, Lloyd Blankfein. Solomon appears to be very tech savvy for a banker, making his personality a match for the digital currency market as he steers Goldman into the future.
Combine all of these factors – testing a resistance level, and financial institutions sending investment signals, and you have the recipe for a breakout as we have seen on July 17. It should also be noted that we are in the middle of a CME contract, with a last trade date of July 27 and a settlement date of August 1. It’s a good idea, therefore, to pay very close attention to Bitcoin prices as we approach the 27th of the month.
Other cryptocurrencies also experienced a nice bump in value. These include Bitcoin Cash, Ethereum, Ripple and EOS, each of which increased by 6 to 10% while investors poured another $20 billion into the market, moving it from $272 billion to $292 billion. While Bitcoin is a top mover, with a 10% increase in value over the last 24 hours, other coins are also making major gains. In the top 100 by market capitalization, Loom, ZenCash, Decentraland, and WAX are all in the 25% range, while Cardano (ADA) is the biggest gainer in the top 10 with over 10% growth.
We’ll keep an eye on Bitcoin for the next several days. Last week, it started at just under $6,400 on Monday, July 2nd, and inched its way up to nearly $6,900 on Sunday, July 8th before falling into another dip with a low at under $6,200 on July 12th. Regardless, today’s spike in the market is good news all around.