Bitcoin made a 20 percent leap to trade above $5000 taking many traders shorting the cryptocurrency unawares. In just one exchange BitMex, an analyst captured the mood in which around $500 million was liquidated.
The new surge in the value of the cryptocurrency took many shorts unawares because the expectations was that the $5000 mark would prove some level of resistance as is norm with such critical values.
April Fool’s Day Joke?
However, due to reasons yet to be explained, Bitcoin has been on the upswing in the past few days confounding many analysts who have tried to explain away the new-found surge giving reasons such as April Fool Day’s joke taken too far.
Nevertheless, the recent price movement has not shown signs of letting off or any indication that this is another fluke.
Cryptoinfowatch has tried to get views from analysts and market watchers in the community to know what reason they attribute the recent upward movement in the price of Bitcoin.
Boost in Market Cap
The market cap for Bitcoin is already up by more than 15 percent at $89.7 billion raising expectations that this may be a sustained run.
As expected, the bull run of the premier crypto carried along many altcoins, especially the top ones with coins such as Bitcoin Cash, Litecoin and Dogecoin making massive gains of 50%, 33% and 35% respectively.
Reason for Spike
On the recent boost in coin value, there are rumors that this could be linked to massive purchases of hundreds of thousands of dollars but experienced market watchers seem to be of the opinion that the recent market activity cannot be traced to a single factor such as that.
The view is that not even the approval for a bitcoin ETF is enough catalyst to initiate a sustained upward market movement. Pushups44, a commentator on the events of the past couple of days surmised by writing,
“There are no suspicious transactions involved – at least none more than in traditional markets. Also, savvy investors have already written off the possibility of an ETF in the foreseeable future. This market is global and not restricted to what U.S. bureaucrats decide.”
Be that as it may, a Reuters report stated that a mystery order is actually responsible for the market spike. This is not surprising considering that the market value of Bitcoin and altcoins are mostly dependent on demand and supply forces.
Big Order Across Boards
Speaking on the order valued at $100 million spread across three exchanges Coinbase, Kraken and Bitstamp, the CEO of BCB Oliver von Landsberg-Sadie said that the single order synchronized and filled within an hour is responsible for the biggest spike in the value of the original cryptocurrency in months.
According to Landsberg-Sadie,
“There has been a single order that has been algorithmically-managed across these three venues, of around 20,000 BTC,”
Bitcoin had traded between the lower $3000 and lower $4000 since 2019 as few institutional investors moved into the industry. This may be the first move by big investors into the market even though no one knows the identity or intention of the mystery investor.
“If you look at the volumes on each of those three exchanges – there were in-concert, synchronized, units of volume of around 7,000 BTC in an hour”.
The evidence is overwhelming that this singular transaction is responsible for the market movement we have seen since April 1. Is it sustainable? Time shall tell.