The cryptocurrency was the top performing currency of 2015, and since January 1 its price has increased by 35 percent against the US dollar.
A technical analysis chart of the Luxembourg-based bitcoin exchange Bitstamp shows that the asset's recent pricing forms a triangular pattern known as a "pennant."
This triangle pattern suggests that bitcoin prices are varying between an upper and lower limit, but the variation between the limits is converging to the extent that it will "breakout" in the same direction as the overall price movement – upwards.
Jonathan Krinsky, chief market technician at MKM Partners, told Bitcoin.com that the chart's pennant pattern suggests that the price of bitcoin will soon rise above its 2016 high of approximately $764, which it reached on June 19.
"We're pretty much at that point where it should break out," Krinsky said.
There are 21 million bitcoins to be found, and there were 15.8 million in circulation as of July 11.
The "Peer-to-Peer Electronic Cash System" was proposed by Satoshi Nakamoto in 2008. Its first four years of operation produced 210,000 blocks of bitcoins; each block included 50 new bitcoins, which were made available for electronic mining every ten minutes.
Bitcoin "mining farms"
Bitcoin miners have set up "farms" across the world; many of them are in rural areas of China, where they benefit from cheap labor and electricity. Miners use supercomputers to process bitcoin transactions, for which they receive nominal revenues.
But processing the transactions is also a lucrative business, because for as long as there are more bitcoins up for grabs, miners earn themselves new bitcoins for their hard work, CPU time and electricity.
The first halving occurred in 2012, and cut the number of generated bitcoins to 25 every ten minutes.
On July 9 there was a second "halving," so now there are just 12.5 bitcoins up for grabs every ten minutes.
Icelander Marco Streng, co-founder of the German firm Genesis Mining, which has "mining farms" in Iceland, Canada, the US and eastern Europe, told Firstpost.com that as a result of halving bitcoins again, uncompetitive Bitcoin farms will go to the wall.
"The most important thing is to be the most efficient miner," Streng said.
"When the others drop out, that means that they leave the market and give you a bigger share of the pie."