Bitcoin surged in the price on Monday night after the Securities and Exchange Commission (SEC) rejected nine exchange-traded fund (ETF) applications last week.
Michael Moro, CEO of Genesis Trading, told CNBC: “Once the news broke about the SEC rejection, the price actually held. We didn’t see the five, 10, 15 percent sell off that you’ve seen in previous reductions and that the technicals right around 5,800 and 5,900 levels held.
“I think the bears have realised that they have run out of steam.”
The cryptocurrency trader explained what will need to be done to get bitcoin back up at the $10,000 mark. He said: “I think the number one thing that’s going to happen is slow and steady growth.
“What you need to see is the less violent moves of five percent up, ten percent up – any slow and steady growth across exchanges.
“What I also think is important is that I believe the market now understands that the SEC’s ETF approval isn’t any time soon. So I think that the market sentiment regarding the product and the approval product process is now far more muted which I think is a healthier outlook for the next twelve months.”
Mr Moro said bulls will start buying bitcoin if it holds above the current level. He said: “I think the key level is $7,150, to be more exact, but if we can hold that next week, I do think we will see a sentiment turnaround in the market.”
He added: “If the 7k level holds for the next week or two weeks, the bulls will 100 percent be back.
“The more comfortable that the lows for the year are in and that we are more likely to see 10k rather than five.”
Bitcoin price was at $6,881.81 at 16:37 (BST) on Thursday, according to CoinDesk. It saw its highest value before Christmas when it reached a monumental price of just under $20,000.
But bitcoin and other cryptocurrencies have faced criticism by banks and finance experts, with billionaire Bill Gates telling CNBC he would bet against the bitcoin and short it if he could.
The Microsoft co-founder said: “As an asset class, you’re not producing anything and so you shouldn’t expect it to go up. It’s kind of a pure ‘greater fool theory’ type of investment.”
He added: “I agree I would short it if there was an easy way to do it.”
Former PayPal CEO Bill Harris also claimed bitcoin is the “greatest scam in history”.
Writing in Recode, Mr Harris said: “Okay, I’ll say it: Bitcoin is a scam. In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen.
“In a pump-and-dump game, promoters “pump” up the price of a security creating a speculative frenzy, then “dump” some of their holdings at artificially high prices. And some cryptocurrencies are pure frauds.”