After hitting a low of around $31,000 in mid-July, bitcoin (BTC-USD) has healthily recovered, currently trading at around $55,000 following resistance at around $45,000 during September. Amid talks of regulation over cryptocurrency markets, however, OANDA Market Analyst Craig Erlam believes that bitcoin’s momentum will continue.
“You look at the charts, for example, and that's all we really have to go off right now — and there just still seems to be plenty of momentum in the move,” Erlam told Yahoo Finance Live. “You look at some of the shorter-term charts, and potentially we're going to see a little bit of profit-taking around $60,000.”
And though this profit-taking may generate some resistance at the $60,000 level, analysts believe that bitcoin is well positioned to break the all-time high of around $63,000 it reached back in April.
“But that all-time high — the temptation around these levels — the idea that we could be seeing bitcoin breaking into new territory, and the excitement that generates on its own, I think it's going to be enough, potentially, to see this rally continue,” Erlam added.
Erlam joined Yahoo Finance Live’s Brian Sozzi and Julie Hyman to discuss bitcoin's price action and the general market outlook. OANDA is a Canadian-based foreign exchange company providing currency conversion, online retail foreign exchange trading, online foreign currency transfers, and FOREX data.
According to Erlam, crypto markets have been steadfast in the face of calls for increased oversight and China’s ban on cryptocurrency taking into effect. In a House Financial Services Committee oversight hearing last Tuesday, Oct. 5, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler suggested that the SEC has the authority it needs to regulate crypto under existing legislation.
“[Bitcoin doesn’t] necessarily need headlines,” Erlam said. “We look at the price action from the last few weeks alone. It looked like we were pushing new lows. It looked like we were just looking at support levels being broken. And there was an incredible amount of resilience in the markets, despite the fact that it looked like technical levels had been broken.”
Part of the reason why so many people want to be involved in bitcoin and other cryptocurrencies is because of the “excitement” that it brings whenever significant price movements occur, Erlam said. Ultimately, he believes, bitcoin is unlike any other asset currently on the market.
“I think we've got to wait a long time to decide what bitcoin is and what it's going to be, if anything,” Erlam said. “I think bitcoin, quite often, can move in line with some assets, but you do see those correlations break down quite quickly.”
Thomas Hum is a writer at Yahoo Finance. Follow him on Twitter @thomashumTV