Bitcoin prices surged today, breaching $1,100 and rising to their highest average since 2013 before falling back and surrendering gains.
The digital currency’s price managed to climb more than 10% during the day, according to the CoinDesk USD Bitcoin Price Index (BPI), however, data reveals that this rally ran into a high number of sell orders.
By 21:45 UTC, the percentage of sell orders made through cryptocurrency exchange Bitfinex over the previous hour exceeded 75%, data from BFXdata showed.
The data point is the first sign that investor confidence could be waning after weeks of steady gains.
With this in mind, cryptocurrency fund trader Jacob Eliosoff told CoinDesk he believes that bitcoin is currently overbought, and that bitcoin could head back down as low as the $800 range.
"Given the spike over the last few days, I'd say the surprising thing is how few sell orders have been encountered."
Overall, bitcoin prices rose to as much as $1,141.05 during the session, their highest total since 5th December, 2013, BPI figures reveal.
By the time they had reached this daily peak, bitcoin prices had come within $25 of their all-time high set on 30th November, 2013.
Shortly after, the digital currency declined to a local low of $1,087.53, before later climbing back to $1,108.64, BPI data shows.
While it's unclear if this current "bull run" is over, several market analysts were quick to position the rally as an extension of improvements in bitcoin as a technology and an ecosystem.
"This rally has been a long time coming. I think it's telling that right now the biggest problem facing bitcoin is how to deal with all the demand it is facing," former cryptocurrency exchange employee Zane Tackett said.
At one point during the day's trading session, GDAX, the digital currency exchange operated by startup Coinbase went down, a factor the company attributed to higher-than-average volumes.
Other exchange operators were quick to note that they believe the price appreciation is due to "new money" entering the market, while emphasizing that data shows overall sentiment is strong.
Whaleclub's Petar Zivkovski added:
"A large majority of [our] traders are long."
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