Bitcoin is at a 'do-or-die' moment and could surge if it can hold above $40,000, analysts say
- Bitcoin could surge if it can hold on to its recent gains and consolidate above $40,000, analysts said.
- Kraken analysts said the token is facing a "do-or-die" moment and could hit a new all-time high.
- Yet there are many risks on the horizon, particularly the threat of regulation around the world.
Bitcoin is facing a "do-or-die" moment and could move sharply higher if it can hold on to the stellar weekly gains that have taken it to roughly $40,000, crypto analysts have said.
The world's biggest cryptocurrency has risen around 17% this week so far to $40,403 on Thursday, according to Bloomberg data, after positive comments from Elon Musk and rumours that Amazon could accept crypto payments.
Analysts at the Kraken crypto exchange said the past week had been "explosive" and that "a market-wide shift in sentiment seems to have converted some bears into bulls."
But they said bitcoin will need to consolidate above the key psychological level of $40,000 for investors to feel confident buying more of the token and pushing the price higher.
"Right now, it's do-or-die for the bulls," they said in a note. "Given BTC's struggles at cracking $40,000 to $42,000 resistance in the past, the bulls will, however, need to turn $40,000 to support should they look to breakout of what has been several months of rangebound trading between $30,000 to $42,000."
The analysts added: "The odds of BTC scoring a new all-time high before year-end have improved."
Alexandra Clark, sales trader at digital asset broker GlobalBlock, said: "With this rebound, over $1 billion worth of short crypto positions have been liquidated and bitcoin's dominance inches closer to 50%."
Bitcoin accounted for around 48% of the total crypto market on Thursday, according to CoinMarketCap. JPMorgan crypto expert Nikolaos Panigirtzoglou has said bitcoin's dominance rising above 50% would signal that its momentum is building again.
Analysts have said that another bullish signal is the fact that the amount of bitcoin on exchanges fell sharply on Wednesday, suggesting big buyers are moving crypto into storage.
Yet there are major risks to the outlook for bitcoin. A key one is the threat of tougher regulations.
Senator Elizabeth Warren has this week been pushing for tougher rules to protect consumers in the wildly volatile market.
She wrote to Treasury Secretary Janet Yellen to say the US's Financial Stability Oversight Council must "act quickly to use its statutory authority to address cryptocurrencies' risks and regulate the market to ensure the safety and stability of consumers and our financial system."