Mysterious buy order may have triggered Bitcoin rally - Could price above $5,000 signal the end of bear market?
- By Pierre-Alexandre
April 3rd, 2019
The price of the leading cryptocurrency, Bitcoin has surged past the $5,000 mark, and there is optimism amongst the different cryptocurrency communities that the bear market is over. If that is the case, then the crypto space should be getting ready for a Bull Run.
Bitcoin price increased following mysterious order
The price of BTC was able to break past the $5,000 mark following a strange large order placed on the cryptocurrency. Oliver von Landsberg-Sadie, chief executive of cryptocurrency firm BCB Group, revealed that a 20,000 BTC order was spread across three crypto exchanges, Coinbase, Kraken, and Bitstamp. Oliver added that the order was worth over $100 million and it was the primary reason behind the recent price spike. The analyst could however not explain the reason why the buyer made such a large order on those crypto exchanges.
There were other comments made by market experts and media houses regarding the recent BTC price increase. According to Bloomberg, “one possible culprit behind the recent price activity may be an April Fools’ Joke.” The cryptocurrency community read an article yesterday which claimed that the US SEC had approved the Bitcoin ETF proposals.
Another popular theory is that the cryptocurrency is scarce and the supply is reducing. An economist while analyzing the current trend on Twitter noted that BTC is the fastest rising asset and the fact that it is scarce in amount caused the price to spike so fast and high as it did a few hours ago:
Asset: #Bitcoin— A v B ⚡ (@ArminVanBitcoin) April 2, 2019
Timeframe: 2 hours
To confirm the end of the bear market, we need to break above $6,000. Looks like there is just too much resistance so this could take some time. We could be bouncing between $3k to $5k till at least September. #bitcoin 🚀— A v B ⚡ (@ArminVanBitcoin) April 2, 2019
This point was supported by Bitcoin Jack, a cryptocurrency analyst and software engineer. The analyst stated that the sole reason for the Bitcoin price pump was due to the technical context. He suggested that supply of the coin dried up and everyone sold at the bottom. At the moment, there is no one left to sell, and the price increased because of those reasons, he added:
Everyone is going to look for a narrative why we pumped. Stop doing that, it’s not there.— Bitcoin 𝕵ack (@BTC_JackSparrow) April 2, 2019
This had a pure technical cause.
Supply dried up. Everyone sold at the bottom. No liquidity above. Overleveraged shorts. Cascading stops and liquidations with nobody left to sell.
Gabor Gurbacs, a digital asset strategist at VanEck, meanwhile has a different view.
1. Lyft 15% fall — “Trades below IPO price.”— Gabor Gurbacs (@gaborgurbacs) April 2, 2019
2. Bitcoin 15% rise — “Scam!”
Mind blown. Seriously. 🤔🤷♂️🤯
In his report to Barrons, the crypto strategists believe that the price increase was caused by the futures market. He stated that the CME futures expired on March 29, and a vast number of positions were rolled into buying BTC futures contract for this month. This was followed by heavy spot-trading and OTC traders which led to the Bitcoin price finally breaking past the $5,000 threshold.
The bear market could be over
The recent BTC price increase has left the cryptocurrency community optimistic that the bear market is over and crypto prices could be on their way to recovery. Wall Street leading cryptocurrency analysis firm, Fundstrat Global Advisors, is of the view that the bear cycle may be starting to turn around for the cryptocurrency market.
1/ CRYPTO— Thomas Lee (@fundstrat) April 2, 2019
Definitely a positive development that #Bitcoin is now above its 200D mov. avg.
--Many consider P>200D as sign of $BTC in positive trend
--BTC acts significantly better P>200D, a win-ratio of 80% vs 36% when P<200D
source: data scientists @fundstrat_ken @AlexKernA pic.twitter.com/Ru19HLlE4G
2/ Reminder that BTC generally generates all of its performance within 10D of any year.— Thomas Lee (@fundstrat) April 2, 2019
--ex the top 10 days, BTC is down 25% annually since 2013 pic.twitter.com/zoEocEEZvu
The firm made mention of this in their 2019 outlook report for the cryptocurrency space which was published on April 2. The Bitcoin price went on to add roughly $1,000 within a day to finally reach $5,000 for the first time in five months.
Fundstrat maintained that it has always been optimistic about the future of Bitcoin and other cryptocurrencies. The first quarter of the year was the best for the crypto market since 2017, and that led the firm to believe that the bear cycle has ended and the prices could experience a turnaround very soon. Fundstrat stated that “Bottom line: We see fewer reasons to question the recent recovery Bitcoin prices—the best quarter since 2017. While the key technical price hurdle is BTC closing above its 200D (currently ~$4,600 and falling by $15 per day), we see 2019 as positive risk/reward.”
The firm pointed out that its outlook was not based on a guess. Instead, it was due to the progress, the crypto ecosystem has recorded over the past few months. The BTC price crossing above its 200 days moving average, the progress made in the institutional custodian space, the efforts of Lightning Network, and the slowing of ICOs were some of the reasons why they are optimistic about the crypto market this year.
The crypto analysis firm also noted that their cryptocurrency indices, the FS Crypto Platform and FS Crypto Exchange indices, all indicated green over the past week, signaling that big money investors were buying BTC, ETH, and other leading cryptocurrencies.
While Fundstrat is making its prediction now, New York-based Delphi Digital revealed last year that the BTC price has bottomed out, and the bear market would soon end. The company in an updated report to its clients last month held on to its prediction, adding that Bitcoin ownership mentality seemed to be shifting towards long-term holding, a feature that could help boost the price in the long run.
With the 2020 halvening on the horizon, it is another reason analysts believe the bear cycle could be over and a Bull Run should be expected. Delphi Digital noted that “The upcoming halvening in May 2020 also functions as an intermediate catalyst for a reduction in selling pressure.”
Ryan Selkis, the chief executive of Messari, stated last month that with the transfer of massive wealth to the younger generation who have more faith in cryptocurrency, the BTC price has the potential to rally beyond the $50,000 mark:
🚀— Ryan Selkis (@twobitidiot) March 28, 2019
There's a $30 trillion "great wealth transfer" expected in the next 20+ years (millennials inheriting money from their parents).
If 1% of that goes into cryptocurrencies, crypto will be a multi-trillion dollar asset class.
That's the conservative case for $50k+ bitcoin.
While the goal of $50,000 per BTC is still far away, there is optimism that the recent price increase would continue. Brian Kelly, the CEO of crypto investment firm BKCM LLC, told CNBC that the price of the leading cryptocurrency would soon reach $6,000.
The crypto market experts believe that all signs suggest that the bottom has been attained and the BTC price is set to go even higher.
Funny how many of the traders who were shorting Bitcoin are now fighting over who called bottom and have now turned Bullish.— Pirate Beachbum (@piratebeachbum) April 3, 2019
Our Bitcoin Sentscore (general sentiment indicator) has reached its all-time high: 7/10!