Bitcoin price took everyone by complete and utter surprise on Friday, as reported by BitcoinNews.com yesterday when the world’s most popular digital asset surged within an hour to record a 17% gain.
The surprise factor was also strengthened by the fact that Bitcoin had hit a new monthly low just days before, as bearish sentiment and death crosses on technical analyses suggested that a major bottom was about to approach.
People simply weren’t prepared to see the bottom so soon, and so when price broke USD 8,000 shortly after we published yesterday’s sentiment analysis, North America was happy to take the bull by its horns and lead it once more to the promised land of USD 10,000.
And so we register a high of USD 10,332 so far, just as North America gave way to Asian trading, where quick profit-taking has brought the bull down a little, but still, Bitcoin sits very pretty at the top with a 25% gain at USD 9,400 at around 10:00 am UTC (CoinDesk). The weekend bull is well and truly back, it would seem!
Altcoin markets have been prime benefactors of the Bitcoin surge, although none have quite achieved the same percentage gains as Bitcoin’s 25%. Bitcoin’s fork Bitcoin Cash is the biggest winner but only achieving 19% gains. Of course, major alts won’t be complaining anyway, with double digit daily gains all recorded by Ethereum (11.6%), Monero (10.2%), Litecoin (13.6%) and EOS (15%).
Analysts will still be struggling to find out what exactly happened, especially as some were blaming Facebook CEO Mark Zuckerberg’s testimonies before the US government and regulators for the pressure on crypto markets. But barely a day after his most recent testimonial, where no new good news came out, the most recent bull emerged.
Some commentators are now saying that it was Chinese premier’s comments that urged China to seize the opportunity for innovation and developing blockchain technology that has pushed Bitcoin to new highs this month but those who have been keeping track of comments from the Far East would note that China has always been pro-blockchain.
I don't always make Bitcoin memes … but when I do, the price moves ~$3000 https://t.co/bn1AeE0pPT
— Alistair Milne (@alistairmilne) October 26, 2019
If anyone needs reminding, China banned all forms of crypto trading in 2017 with the Chinese yuan back in 2017, which caused huge Chinese-led exchanges like Binance to move out of the country. However, in the following years, the state has brought on continuous blockchain innovation throughout its many provinces. A sign that blockchain technology was welcome, if not crypto itself.
And, a lot of analysts also noted that sentiment had never been worse in the market, with even Mati Greenspan, senior eToro analyst saying that low prices were in the wings. But he did say also just recently that at such low volumes, sudden moves would be very possible in the Bitcoin market:
“Sentiment can change pretty quickly in this market, especially while volumes are low.”
And according to data analytics provider Skew, this is exactly what has happened in the past 24 hours. According to them, when there was a USD 200 recovery just before the USD 1,000 jump, BitMEX crypto exchange recorded a liquidation of some USD 150 million in short positions. This, they say, triggered what technical analysts call a “short squeeze“, in which a rapid value increase happens when short sellers try to cover their positions, buying up low orderbooks and driving prices up.
This could make a more logical explanation, given that it was the low volumes on Bakkt and the failure to meet hyped-up expectations that were widely blamed for the preceding falls in price — all at very low volumes.
This entire year has been a demonstration of how low volumes and thin orders have been making the market even more vulnerable than ever to so-called Bitcoin whales, who can place large orders or liquidate short positions in a massive volume. Several months go, daily trading volume was over USD 4 billion, but recently, the top ten biggest exchanges worldwide have barely recorded USD 200 million daily volume, a 20-fold drop from the year’s peak.
Bakkt has enjoyed some action in this current rally, now recording a new all-time high in daily volume, with 1,156 futures contract changing hands.
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