Bitcoin Price Zoomed 700% Since March 2020, But Could Dip By 25%

Bitcoin zoomed past $40,000 Thursday, continuing its upward rally that began last March when its value dropped below $4,000 at the outset of the COVID-19 pandemic. Bitcoin has climbed more than 700% since then, but analysts say a pullback in the price of Bitcoin and other cryptocurrencies could happen in the coming days.

Gavin Smith, chief executive officer at Panxora Group, a cryptocurrency consortium, said investors should not expect the price to move up in a straight line. "We can expect dips as sharp as 25% at times as investors periodically withdraw profits," he told Reuters.

Bitcoin went as high as $40,402 before closing at $39,505 Thursday. The rise in price was attributed to the political uncertainty in the United States when supporters of President Donald Trump stormed the Capitol because they believed the election was rigged in favor of Joe Biden.

Other cryptocurrencies, led by Ethereum, also experienced an increase in prices in the previous days before retreating. Ethereum closed Thursday at $1,208, some $200 below its previous all-time high price of $1,448.

According to Reuters, there is an observed increase in retail participation in the previous days in the cryptocurrency market. Google Trends data shows an increase in search interest for Bitcoin and the number could even go up and match that of December 2017.

Another data that suggests retail interest has arrived is the increase in Bitcoin wallets with non-zero BTC balances, Reuters said. The number of Ethereum wallets with non-zero balance has also increased to a new all-time high.

The parabolic rally led to bullish predictions from many analysts, including analysts at JPMorgan, who predicted a future price of $100,000. They, however, warned that Bitcoin would be unsustainable at the price level.