Bouncing back sharply from its low point of $3,122.34, Bitcoin has shown some much-desired upside momentum.

BTC Stages Price Reversal

Last four days have brought smiles back to the faces of Bitcoin and cryptocurrency investors who have witnessed the value of their portfolio shrink since January this year when the cryptocurrency market hit an all-time high.

Prophets of doom had sounded the death knell of the leading cryptocurrency calling it a bubble. However, proving skeptics wrong, bitcoin and other cryptocurrencies over the last 4 days have staged a remarkable rally.

Bitcoin price has bounced back from its year low of $3,122.34, which it hit on December 15. At the time of writing the digital currency is trading at around $4100, having managed a jump of over 30% in the last five days.

The price reversal demonstrates the ability of Bitcoin and other cryptocurrencies to stage a comeback despite sharp declines.

Reasons for the Jump

According to Forbes, market analysts are attributing the bounce to strong support near the $3000 level and a short squeeze.

Joe DiPasquale, CEO of cryptocurrency fund BitBull Capital, said:

Yes, the $3,000 support level and a short squeeze has helped Bitcoin price recover, there is also a lot of media coverage around Mark Dow closing his short position, which he opened when Bitcoin was around $19,000, adding to the positive sentiment.

Co-founder of crypto analytics platform TheTIE.io, Joshua Frank, discussed the social sentiment surrounding Bitcoin:

66% of tweets mentioning the end of the year and Bitcoin are positive. 67% of tweets that mention Bitcoin and News are positive.

Caution Advised

Some analysts have emphasized that investors should maintain discretion while trading. Whether there is enough upside momentum or not needs to be observed. In the case of insufficient volumes, there may be a further downside.

Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet cautioned:

Traders must be careful as this may be a fake out. Right now, it isn’t a good time to buy and it hasn’t been for a while. It’s too choppy.

CryptoPatterns publisher Jon Pearlstone also noted:

While there are bullish signs since the December 15 Bitcoin low, a 25% rally is not enough to indicate there’s a strong case for much higher prices. […] Price now needs to achieve a 100% move from the bottom just to get back to the key support at $6000 that held through most of 2018.

Mati Greenspan, senior market analyst for social trading platform eToro, also added his thoughts:

We’re nowhere near where we were a month ago, let alone a year ago […] But we’re way above anything that we could have imagined two years ago. Price can be a slippery indicator when trying to measure growth.

While its good to see the entire cryptocurrency market in a sea of green, it may be early days to conclude that the market has bottomed out for good.

Do you think that the Bitcoin price has bottomed out and we can expect a bull-run? Sound off in the comments below.

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