Bitcoin is on fire.
The cryptocurrency soared above $8,000 this week, pushing its total gains for the year to 125%.
Bitcoin is now sitting just under its 52-week highs, but some experts warn a pullback could be coming.
“We had rallied above [key resistance] but then failed on two different occasions,” Anthony Grisanti of GRZ Energy said Wednesday in a “Futures Now ” segment. “[Bitcoin] has doubled in the last five months, so I would expect a bit of a pullback, and on the downside, there’s a very interesting gap there, from $6,870 to $6,425.”
“If we start getting some profit-taking in this market, it will fill in that gap, but that’s actually very healthy for markets going forward,” Grisanti said.
The technicals may signal a pullback, but Path Trading Partners chief market strategist Bob Iaccino says there’s a key catalyst behind the bitcoin boom that could change the ecosystem, making the cryptocurrency much more friendly to consumers and businesses.
“I do believe I know part of the reason why [Bitcoin is booming], and that has to do with the inception and the application of software called the Lightning Network, which actually makes small transactions a lot easier for those who hold bitcoin,” said Iaccino.
“Where you look at Visa, who can transact 65,000 transactions per second, Bitcoin’s [prior level] was about seven, and now with the implementation of the Lightning Network, which is a software add-on, you can actually get these smaller transactions off the blockchain network, making adoptability of bitcoin as a currency a lot easier.”
Bitcoin futures were trading about 5% higher on Wednesday, hovering above the $8,100 level.