Excitement has hung in the air all through March as Bitcoin has been able to surpass the $65,000 mark at least once; at the same time, this digital token has also recovered from highly volatile swings that took it below the $55,000 level. This price movement corresponds with a general sense of optimism not just in the cryptocurrency markets but also on Wall Street. The question now is: How long can this rally last?
As can be expected, multiple predictions are emerging even as Bitcoin does not show signs of moving past $60,000. When we look at Bitcoin's previous historical highs in March, we see a holding pattern indicative of a support level. In 2016, for example, a short-term rally in the Bitcoin price at the end of March caused a massive spike that lasted a few months, but it was ultimately followed by a collapse in October 2016.
The aforementioned collapse also had a negative effect on the overall cryptocurrency market, which was not as mature back then, and the maelstrom lasted until November 2016. From this point on, there were mini rallies followed by pullbacks in other words, volatility got the best of the markets at the time. We may be headed in that direction now, but not everyone is convinced that the Bitcoin rally is over.
Tone Vays, a digital currency investment strategist, believes that the next four months will be a continuation of the 2021 Bitcoin rally. He is convinced that Bitcoin will continue to sail towards the $100,000 exchange price, and he is not alone in this forecast. If we look at some of the most outlandish Bitcoin futures contracts currently trading at the Chicago Mercantile Exchange, we can see that quite a few are parked at the $100,000 strike price, but they are still in the minority.
All in all, the current Bitcoin rally is not really sustainable, and quite a few active traders are aware of this. Unless more cash from institutional investors flows into the market, strong pullbacks will be a common feature of the cryptocurrency markets, and this means that a continuation of the rally could be upended at any time.