Bitcoin jumps above $10,000 for the first time since June

Key Points
  • Bitcoin jumped above $10,000 for the first time since early June after relatively muted recent price action.
  • Bitcoin has risen nearly 11% over the past 7 days, while equity markets struggled last week as gold continued to rally. 
  • Stimulus measures from governments around the world to fight the economic fallout from the coronavirus pandemic could also be supportive to bitcoin, one industry participant said. 

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Bitcoin jumped above $10,000 for the first time since early June after relatively muted recent price action. 

The digital currency was trading at $10,196.27 at around 12:31 p.m. Singapore time, 2.55% higher than 24 hours previously, according to data from Coindesk. 

Bitcoin last crossed $10,000 on June 3 and has since seen a steady decline. But over the last 7 days, Bitcoin has risen nearly 11%. 

Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC that large players were debating whether to sell off their bitcoin to smaller entrants in the market which could push the price lower and make it more attractive for the bigger traders to buy more of the digital asset.

"This doesn't seem to have happened," Ayyar said. "What we have unfolding is potentially re-accumulation by big players, joined by smaller traders in an attempt to push BTC higher past 10K and more past 10.5K, which is the big resistance level, where BTC last put in a high."

"We still haven't broken the 10.5K level, if that happens, BTC is probably running to 15K. All signs point to that at this point," he added. 

While bitcoin was higher last week, major Wall Street indices including the S&P 500 were lower. Gold, however, continued to rise and hit a record high on Monday. Gold is seen as a so-called safe-haven asset that investors buy in times of uncertainty. 

Bitcoin has sometimes been called "digital gold" with advocates saying it could be a good safe-haven investment. However, bitcoin has tended to trade closer to equity markets in recent times and is known for its huge volatility

Both equity markets and gold have been supported by recent economic stimulus packages from governments and central banks around the world in a bid to help fight the economic fallout from the coronavirus pandemic. For example, the European Union reached a nearly 2 trillion euro recovery plan last week

In addition, investors are closely watching the numerous coronavirus vaccines being developed around the world. Recently, Oxford University carried out early-stage human trials with pharmaceutical giant AstraZeneca. The drug produced a promising immune response, according to data published in the medical journal The Lancet.

Ayyar said that bitcoin could benefit from these stimulus measures as well as hopes for a vaccine. 

"My view is that with the major governments declaring unprecedented stimulus packages ... we will see continued bullish momentum across markets. So that includes equities and gold as well. And BTC and crypto will follow on this regard. Added to the fact that a vaccine seems within reach as well now, no reason to be bearish near term," Ayyar said.