Bitcoin jumped Friday morning, bringing its post-Tax Day gains to more than 8 percent.
The cryptocurrency spiked about $300 to a high of $8,554.97, according to CoinDesk's bitcoin price index. Bitcoin was trading more than 2.7 percent higher near $8,500 as of 4:10 p.m. ET.
That marked an 8.5 percent rise from a low of $7,834 hit Tuesday, which was the original deadline to file taxes this year. The IRS gave taxpayers another day to submit their returns after the agency's web page for making the payments crashed Tuesday.
Bitcoin's climb since Tax Day
Many cryptocurrency analysts attributed much of bitcoin's decline in the last two months to investors cashing out to pay taxes on last year's massive capital gains. Tom Lee of Fundstrat Global Advisors estimated U.S. households owe $25 billion in taxes on their cryptocurrency holdings. He predicted bitcoin would recover after Tax Day, and has a $20,000 mid-year price target.
"The U.S. tax day is behind us (April 17th) and since then, the overall tone in the crypto market has improved," Lee said in a note to clients Friday. "We believe the 'winter' is ending for Bitcoin, as the crypto to fiat pressures from tax day subside, and as headline risks seem to be fading."
He pointed to the CoinsharesCrypto ETF, which trades in Europe, as a leading indicator for bitcoin prices. Lee compared the ETF to Punxatawney Phil, the groundhog who annually predicts whether winter is over. If Phil sees his shadow, winter goes on and if not, then winter is over.
"We believe large institutional investors globally use this ETF as a way to quickly gain exposure to Bitcoin," Lee said. "Hence when shares rise, big money is buying bitcoin."
Technical analysis also indicates bitcoin could be on its way higher, although by a smaller amount.
"Bitcoin now is testing a very important downtrend line, the same one that the Cryptocurrency failed at in January and again in March (on a log scale)," Frank Cappelleri, executive director, institutional equities at Nomura Instinet, said in a note.
If bitcoin can break above the line, charts indicate the price can easily rise towards $9,173, he said.