The price of bitcoin has continued to rise over the last week and some analysts are now suggesting that the cryptocurrency is entering a strong bull run.

Bitcoin was trading at $8,730,11 as of 9:30 p.m. EDT, down over the last 24 hours as some investors took profits but still well up on prices below $8,000 a week ago. Bitcoin is now up some 135% since a low of $3,850 March 12.

There are several possible reasons behind the strong performance. Bitcoin and other cryptocurrencies did take a hit along with broader markets during the earlier stages of the COVID-19 pandemic hitting the U.S. but have rallied since that point. The forthcoming bitcoin “halvening” is likely playing a role as well. Eight days aways, the halving will cause the supply of new bitcoin available through bitcoin mining to be halved, which cuts in half the amount of bitcoins awarded miners that create them.

According to NewsBTC, analyst Nunya Bizinz has noted that a signal that proceeded some of bitcoin’s most important rallies over the past few years has been spotted again. That signal, a parabolic stop-and-run reversal indicator, has been spotted six times in the last five years and always resulted in bitcoin seeing a “substantial upside.” Cointelegraph took the market signal theory further, using Fibonacci retracement levels to suggest that bitcoin may be set to rally in a similar fashion to 2015. In that year, bitcoin grew by 10,000%.

Billy Bambrough at Forbes is a little less exuberant, noting that the price of bitcoin is likely to pass $10,000 before halving without making any bold predictions for the future.

Don Guo, chief executive officer of blockchain firm Broctagon Fintech Group, told SiliconANGLE that there are several factors at play.

“The government stimulus packages certainly have a role in this bull run for digital assets,” Guo said. “The printing of money to deal with the crisis brings down the perceived value of fiat currencies and, with interest rates flat, savings become an unviable way to generate returns.”

Meanwhile, he added other assets such as equities still seem risky as lockdown persists, so investors are being forced to seek out other investment opportunities. “This is where cryptocurrencies come in,” he said. “Investors are hoping to hedge against the turbulence in traditional markets, and with bitcoin not tied to any government decisions and inflation, it becomes like a good bet.”

But Guo said it’s not just the pandemic. “This timing has conveniently coincided with the impending halving in May, reducing the supply of bitcoin entering the market,” he said. “Not only does halving boost the price as a result of the added scarcity, but the additional media attention and the positive impact this has had on bitcoin prices historically will drive up demand.”

Photo: Marco Verch/Flickr