Bitcoin and the cryptocurrency markets could be on the verge of a very big breakout.

Brian Kelly of BKCM said yesterday on CNBC that this current bitcoin and cryptocurrency rally is likely for real, for several reasons.

The most significant being rumors of an ETF.

However, there also seems to be some significant institutional interest as well as the interest that comes with an increasing market cap.

(Source: https://www.quora.com/What-is-George-Soros-Theory-of-Reflexivity)

Reflexive market?

Overall, bitcoin and cryptocurrencies have shown to be a very reflexive market. Meaning that as prices go up, more and more people want to take part in them.

Though, the inverse didn't really hold true on this latest sell off. As prices declined, interest waned, but projects and technology continued to advance.

Which was one of the major reason I continued to be bullish on the space and future prices.

Bitcoin fell to a low of around $5,800 in June and today is trading for roughly $8,200 per coin.

Not only is the price increase likely attracting investors, but the technicals are also finally starting to flip.

For most of 2018, the technicals on bitcoin have been bearish.

However, right now, it is looking like bitcoin is finally breaking through some longer term trend lines to the upside.

Price action that signals to traders that now is the time to start going long the coin as opposed to shorting it.

Brian Kelly sees the sentiment shifting as well:

"There were a lot of big sellers out there. Those big sell-offs included sales ahead of tax season and the Mt.Gox hack.That appears to be over."

(Source: https://www.cnbc.com/2018/07/23/crypto-trader-explains-3-reasons-why-bitcoin-rally-is-real.html)

Much of the current price increase could be related to anticipated approval of a bitcoin ETF.

Something markets are anticipating hearing more on by August 10th.

Kelly says that in his opinion the chance of the ETF being approved by August 10th are very slim.

I am not so sure I agree with his opinion, but based on people Kelly talks to he said not to expect a bitcoin ETF in the very near future.

(Source: http://immamatukio.blogspot.com/2016/06/hifadhi-ya-selous-yapoteza-asilimia-90.html)

Institutional interest increasing?

On a positive note, based on people that Kelly talks to, he says that institutional interest in the space is heating up rather significantly.

According to Kelly, they are finally getting serious about bitcoin:

"I can tell you from the calls that I'm getting, people that looked at [bitcoin] in December and didn't like the price are coming back now and saying, 'Alright, this thing is not going away. We need to understand what it is. Where does this asset class fit in to our portfolio?"

(Source: https://www.cnbc.com/2018/07/23/crypto-trader-explains-3-reasons-why-bitcoin-rally-is-real.html)

It sounds like it could be a combination of all 3 factors causing the rally.

Speculation about a bitcoin ETF, the technicals flipping from bearish to bullish, and institutional money starting to dip their toes in are all contributing to rising prices.

If bitcoin could break $10k, we would really be off to the races based on the charts.

Stay informed my friends.

Image Source:

https://www.stuffmedia.com/techstuff-daily/a-whale-of-a-bitcoin-tale.htm

Follow me: @jrcornel