After a tumultuous two months during the COVID-19 pandemic, the price of bitcoin is starting to return to form as the cryptocurrency sees its highest prices since the second week of March.

During the pandemic and related financial turmoil, bitcoin has been on a rollercoaster ride, dropping briefly below $4,000 March 12, down from more than $10,000 in the middle of February before slowly rising again.

Over the last week, bitcoin’s price has seen sustained growth, from $6,783.06 April 21 to $7,703.29 as of 10 p.m. EDT. A similar trend can be seen over the last month, bitcoin having dropped to $5878.71 March 30.

In the short term, bitcoin traders are looking to $8,100 as the next resistance point, according to Bitcoinist. Others, such as NewsBTC suggest that bitcoin may be entering a full-blown bull run should history repeat, comparing the current rally to that of February 2019, which saw bitcoin’s price move from $3,000 to $14,000 in five months.

One factor that may be influencing bitcoin’s upward movement is the forthcoming “halving” expected to take place May 12.  The halving will cause the supply of new bitcoin available through bitcoin mining to be halved, hence the name. That creates a scarcity of new supply, which in traditional economics causes prices to increase.

A report from Glassnode also noted that many investors are holding their bitcoin during the coronavirus pandemic, indicating that long-term holders are not concerned by the price decline in March. Nearly 43% of circulating bitcoin supply has not moved in the last two years, a 10.4% increase from the same time last year, the report noted.

The unknown factor in looking forward, however, is the broader economy. Although bitcoin has long been pitched as a safe haven during difficult times, that theory fell flat in March as bitcoin declined along with equities markets. How long the pandemic continues, and if and when economies may start to reopen and eventually return to some sense of normalcy, is anyone’s guess at this stage, although there are some signs that the worst may be over.

Bitcoin may be well-placed to grow in the coming year alongside the recovery of broader markets, but given its history, it could go in either direction.

Image: quoteinspector/Flickr