2 weeks of growth see bitcoin price hit 40 day high
Cryptocurrency prices may have more reasons to go up than down right now.
Cryptocurrency markets seemed to hit their bottom two weeks ago, with an especially sharp bounce on 13 April propelling prices back up. After weeks of slow to medium-speed bleeding, bitcoin prices are going up faster than they went down.
Two weeks of recovery has put bitcoin prices back above $9,200 at a 40 day high, while the global cryptocurrency market cap has pushed $420 billion for the first time since early March. Despite its own growth, bitcoin's market dominance has shrunk from 45% at the start of April to about 37% today.
Much of the gains came in recent days, as elements of FOMO enter the market and gains continue with relative stability day on day.
The gains might also be fuelled by news that has emerged in the last few weeks, including confident expert predictions that bitcoin reached its 2018 bottom at $6,500 and would continue climbing from here. One of the stronger signals might have come in the form of bitcoin buy/sell ratios. Bitcoin hit over 90% in buy orders, for the first time in over a year, going into last weekend. It has since slumped marginally to about 88%, indicating that some are happy to cash out but the majority are trying to get in. This outsized demand might be one of the more natural factors to drive a price rise.
Without any clear answers, there's a tendency to find meaning in errant patterns, and the "Muslim money" theory is probably one of the goofier notions to gain traction in the recent upswing.
However, one of the most likely factors driving the rise is the end of tax time. It's the first time the tax man has come for digital wallets since cryptocurrency hit mainstream consciousness in 2017, and the moment arrived with a pronounced lack of clarity. A lot of crypto users found themselves in a tough spot at tax time, and their pain was being widely publicised to the empathy/shadenfreude of society at large. A lot of people who wanted to get into cryptocurrency would have been waiting on the sidelines until tax time passed.
The recent influx of institutional money to cryptocurrencies might be another likely factor. As OTC cryptocurrency platforms report, there has been no shortage of demand even as prices slump, and things have actually been going better than ever. Those OTC platforms are where the big money hangs out, and it might be worth remembering that relatively thin volume on retail exchanges isn't indicative of the total amount of money on the market.
It might be causing problems though, and the more cynically inclined have pointed to stark recent price movements, both up and down, in the thin market as a sign of deliberate order hunting by price manipulation.
Will the rise continue?
There's no shortage of predictions on either side at any given time. Barclays declared bitcoin dead and gone shortly before the recent rise, and someone's going to be left disappointed no matter what cryptocurrency prices do.
Certain coins might be overbought and can expect readjustments, but the market as a whole seems to be relatively stable. It's too early to get optimistic, but at the same time, there's no clear reason not to be. Prices have mostly climbed back above the troughs of the late January crash, but are still shy of the immediate recovery prices in mid to late February. It was at this point that tax concerns and a worrying regulatory environment paralyzed the markets in a lazy downward spiral.
With real world cryptocurrency applications pushing forward apace, and a "the worst has passed" vibe in the crypto-regulatory space, it would take a fairly surprising turn of events to crash the markets right now.
Not that it really needs any reason to crash. The prices will do as they will, and anyone who claims to be 100% sure about them is probably lying.
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO