The bitcoin rally is underway and crypto trader Brian Kelly said the digital coin will likely continue to appreciate in value.

On Tuesday, bitcoin jumped above $8,000 and is now up 20 percent in one week.

While bitcoin is nowhere near its December highs of around $19,500, the cryptocurrency has steadily increased in the last few weeks alone. Bitcoin fell below $6,000 in June and left market watchers wondering if the coin had hit bottom.

"There were a lot of big sellers out there," Kelly, founder and CEO of BKCM LLC, an investment firm focused on digital currencies, said Monday on CNBC's "Fast Money." Those big sell-offs included sales ahead of tax season and the Mt.Gox hack.

"That appears to be over," Kelly said, calling the cryptomarket "a very reflexive one," meaning, the more valuable it becomes, the more investors want it.