Cryptocurrency prices jumped on Thursday, buoyed by a major Bitcoin surge to a two-week high. Unlike in other instances, when the price jump or dive has been triggered by eventualities or news, this time there was no obvious news to mark such gains.
Within the space of an hour on Thursday 12th April, Bitcoin rose by more than $1,000, breaking above $8,000 for the first time since March.
The movements of the world’s most valuable cryptocurrency are usually reflected across other virtual currencies, and this unprecedented spike was no exception.
CoinDesk reports that short liquidation or unwinding of short (sell) BTC trades has played a big role in the sudden rally. It picked up bids at $6,766 at 07:00 GMT and scaled the $7,000 mark at 11:00 GMT – a move that seems to have triggered stop losses on short trades. Technical buyers may have jumped in as the move above $7,000 also marked an upside break of the falling wedge pattern.
It’s worth noting that, although it took two hours to move from $6,766 to $7,000, the next $1,000 jump happened in just 45 minutes. The price surge is as extracted from coinmarketcap below:
Betting Against Bitcoin
After skyrocketing to almost $20,000 late last year, Bitcoin’s price has been on a downward trend for the better part of this year. This has been triggered by worries about a regulatory clampdown across the world and concerns that its speculative bubble is about to pop.
This has seen a lot of traders betting heavily against Bitcoin – to short – and other cryptocurrencies. In the last few days, prices have stabilized and rose on Thursday squeezing the shorts out of their positions leading to a price surge.
Charles Hayter, founder of cryptocurrency analysis website CryptoCompare says that the biggest moves in Bitcoin trading happened in Bitfinex before spreading to other platforms.
People overshorting on Bitfinex so bit of a squeeze there
– Hayter told Reuters.
Naeem Aslam, an analyst at ThinkMarkets who owns and trades virtual currencies also told Reuters that sentiment towards cryptocurrencies has improved in recent days and prices were consolidating, which can lead to the price suddenly “exploding”.
While most analysts do not associate the sudden rise with obvious news, one cited recent report indicated that prominent billionaire trader George Soros has entered the crypto world as a trader leading to an excitement among crypto enthusiasts.
What do you think the reason behind the recent surge in Bitcoin prices is? Let us know your thoughts in the comments section.