(Bloomberg) -- In a period defined by market volatility, Bitcoin hasn’t gone much of anywhere. Crypto analysts are betting bored millennials can drive a breakout rally.
The largest digital asset has traded in a narrow band between $8,500 and $10,000 for the past two months, the longest it’s gone without substantial movement this year. In addition, its 14-day Relative Strength Index (RSI) -- which measures the magnitude and persistence of price movement -- is at 48.5, a neutral point that underscores its muted range.
“If it breaks above its trend line, it’s going to get some nice momentum,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Maley sees demand coming from relatively young retail traders who use platforms like Robinhood, the same cohort that’s sometimes been cited for driving the record comeback in stocks from the worst of their coronavirus swoon. While professional investors have scoffed at some of the youngsters’ hubris and willingness to ignore danger signs, the thousands of small-time players could generate a frenzy if Bitcoin climbs past its 2020 high of $10,400, according to Maley.
“They’re playing in another sandbox right now, but they’re keeping their eyes on all the other sandboxes because they know that something like Bitcoin can make them a big profit very quickly,” Maley said. If it reaches a new high for the year, “interest in that is going to pick right back up and all those momentum players are going to say, ‘I’m in.’”
Bitcoin, coming off its best quarter since June 2019, rose as much as 1.5% Wednesday to trade around $9,280, while peer coins including Litecoin and Bitcoin Cash also advanced. Bitcoin has gained about 30% this year.
Benn Eifert, managing partner of QVR Advisors, says he sees a lot of overlap between the Robinhood types piling into shares of bankrupt companies, for instance, and those who were involved in crypto in 2017.
“It’s a social media-like dynamic,” he said. “Someone points out a stock that’s moving and posts some charts, an influencer says, ‘Ok we’re buying it, buy the calls’ and then many people pile in.”
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