Bitcoin surged unexpectedly overnight, stimulated by an unusual high-volume purchasing spree, bringing the bulls back into the crypto-sphere.
Despite last week’s fall below the key $4,000 support level, Bitcoin soared as much as 20, breaking $5,000 for the very first time since November of last year. By mid-morning, it had settled around $4,700, still up 13 percent in its most significant one-day gain since the first quarter of 2018.
Bitcoin surged to near $20,000 in late 2017, the tip of a bubble driven by retail investors, before completely collapsing last year by as much as 74 percent, with trading primarily dominated by smaller hedge funds and institutional companies.
Oliver von Landsberg-Sadie, president of cryptocurrency company BCB Group speculated that today’s gains were likely stimulated by an order worth about $100 million spread across U.S.-based exchanges, including Coinbase and Kraken and Luxembourg’s Bitstamp.
Reviewing data from CoinMarketCap, the rally to a 4.5-month high was accompanied by a surge in 24-hour trading volumes to above $15 billion– the highest since mid-January 2018. Because of this, analysts expect the bullish turnaround to continue.
Abrupt swings in Bitcoin are nothing new; however, its price performance has been moderately controlled this year as investors pondered the possibilities for mainstream adoption after last year’s 74 percent crash. Market experts say big buy orders in Bitcoin can commonly lead to outsized moves, in part since volume is spread out across dozens of venues. Trend-following private investors and exaggerated news coverage can also heighten volatility.
Altcoins follow Bitcoin’s lead
In general, the leading ten coins all saw tremendous gains versus USD on the day, with Bitcoin taking the spotlight. Ethereum broke an essential mark of $150, while Litecoin ventured into the $70 region. No coin in the top ten, excluding stablecoin Tether saw gains against the dollar that were less than 5 percent.
Mati Greenspan, an analyst at eToro in Israel, explained, “Usually bitcoin is the leader of the market and altcoins tend to follow, as far as direction and sentiment is concerned,” adding, “Today bitcoin is in the driving seat.”