Bitcoin Price Plummets In Market Sell-Off, Then Rises Again
There was a significant sell-off last week with Bitcoin(BTC) sinking back down to around $6,600, unsurprisingly BTC has once again climbed back to $7,800 mark reflecting the indecisiveness among the crypto community.
Bitcoin experienced a short-term bearish reversal. What triggered this sudden reversal? Gilad Raz, CEO of Blockium explains, the major fall of Bitcoin in the market a few days ago is no mystery. “This was clearly a direct result of a huge sell order of exactly 3,645 Bitcoin, or $26 million, on Bitstamp on May 17. This is also not the first time that large sell-orders cause panic amongst traders and greatly affect the prices of the market,” says Raz,
Raz explains what we’re witnessing is a domino effect of sellers cashing out, and this is often the result following major rises in prices. More often than not, crypto buyers are cashing out, or exiting, in order to cover their investments.
This recent Bitcoin rally signals major indecision which in turn indicates that the trend will continue. Alex Mashinsky, CEO of Celsius Network says: ”The exaggerated highs and lows of the Bitcoin in the past few days reflects the indecisiveness among the crypto community regarding the direction of Bitcoin. While we saw Bitcoin double in less than 30 days, many do not believe the rally and see it as another lower high on the way down.”
Mashinsky adds, at Celsius the group have processed over 1.2 billion in coin loans in the past 10 months and see a continued surge. He expects Bitcoin to be above $10,000 in the next 30-60 days.
U.S. China Trade War
There has been speculation that the escalating trade war between China and the U.S. is also playing a role in driving investors toward Bitcoin. Ben Waters, Head of International Markets at IOST, explains, against the backdrop of volatility in the traditional equity markets — due to a number of factors, including the U.S.-China trade wars — investors may now be diversifying into opportunities that have low correlation to geopolitical events.
“With cryptocurrencies gaining recognition as an asset class, investors are looking at crypto as an alternative choice to traditional stocks and diversification of their portfolio. As “crypto spring” blooms into place, another sign of bullish market sentiments is when negative news does not weather down the crypto marke,” says Waters.
Many still believe institutional buyers are responsible the for the sudden rise in Bitcoin because retail investors lacked the capital. Jehan Chu, managing partner at Kenetic, explains the ‘recent stampede’ was being driven by the beating drum of investment and institutional participation in the space from Fidelity to Facebook to Rakuten.
Chu says: “Furthermore, serious investors taking the view that Bitcoin is here to stay represents a significant upside hedging opportunity relative to shaky equity market performance.”
Dave Hodgson, co-founder of NEM Ventures, the venture capital and investments arm of the NEM, explains the current price movement has been building for a while and has now broken the important $6,000 point.
“This helped further improve sentiment and at the same time sell pressure lifted, which helped cement gains. There are supporting factors at play and we remain bullish on BTC, as well as for others such as XEM and ETH in 2019. We are targeting $9,000 over the mid -term, but monitoring multiple indicators as there is still some risk of short term volatility and drops against the trend." says Hodgson.
It seems there are a number of catalysts driving Bitcoin prices. Crypto trading has a history of being volatile.