Bitcoin Surges in First Week of April 2019, Hitting Year-High
Bitcoin is making headlines once again after kicking off the month of April with a significant surge that saw its price rise above the $5,000 mark after a lengthy slump languishing below that level.
The price of Bitcoin has oscillated between $3,000 and $4,000 for quite some time now, so there is a lot of excitement about this new price rise. Wednesday marked a new 2019 high of $5,346. Another spike which happened on Tuesday saw the price surge from $4,146 to $4,854.
A short history of Bitcoin
When people talk about digital currency, the chances are that Bitcoin is the first cryptocurrency that will come to mind. Bitcoin was the first cryptocurrency and has been around for some time. This particular cryptocurrency was created by Satoshi Nakamoto, the legend that is credited with creating blockchain, the technology that supports the existence of digital currencies.
Bitcoin’s first transaction happened in 2009, beginning a whole new monetary economy based in the digital space. Since then it became quite popular, and a lot of developments have happened resulting in improvements in the system as well as the creation of other cryptocurrencies.
It has also gained a lot of value, earning global recognition after its price rose to almost $20,000 towards the end of 2017. Many people stopped viewing it as a currency through which they could exchange value and instead treated it as an investment opportunity. This is one of the main reasons for price volatility. However, the price of Bitcoin has since dropped from its former glory.
Bitcoin finally makes a big move
It has been a while since Bitcoin has shown promise of regaining its former value. The price has been stuck below $5,000 for more than four months until the 5.9% surge on Tuesday, which was one of the biggest spikes that Bitcoin has experienced so far this year.
The spike might signify the end of the trend that has persisted since 2018 when the cryptocurrency market experienced a massive crash. Bitcoin lost almost 80% of the value it had gained. Analysts have been expecting the cryptocurrency to turn bullish again and that recovery seems to be long overdue. Bitcoin’s newfound momentum this month could highlight a possible recovery, in which case the cryptocurrency prices are likely to continue increasing.
Other cryptocurrencies’ prices also rise
Some of the other major digital coins including Ethereum, Ripple, Litecoin, Eos, Dash, Cardano amongst others also enjoyed significant gains. Ethereum surged from $143 to $173 on April 2 according to Worldcoinindex, the same day that the massive Bitcoin spike was observed.
Litecoin also had an impressive performance on that Tuesday, its price rising from $61.32 to $83.20. It is likely that the altcoins whose prices rose were caused by Bitcoin’s increase too.
What was the cause of the sudden Bitcoin surge?
Experts believe that the price of cryptocurrencies will decrease again if there is nothing to continue to drive the prices up. So far the only solid factor market experts confirm contributed to the cryptocurrency market surge is market demand.
Bitwise CEO Hunter Horsley pointed out during a CNBC interview, that a recent report from Reuters might be the potential catalyst for the sudden surge in the price of Bitcoin. The report suggested that a crypto investor recently purchased Bitcoin worth $100 million. It is no secret that such volumes usually influence price movement.
Horsley claims that an order that big would be enough to influence the price of the cryptocurrency because Bitcoin has a small daily trading volume. Zennon Kapron, a Director at a FinTech consultancy firm called Kapronasia, believes that a single trader or a group of traders may have influenced the market by triggering a large Bitcoin purchase.
Many people looking to trade the cryptocurrency market had been waiting for the right time to do so. This is considered to be just before there is a surge in the market, so a report about a big purchase might have indicated to other traders that the time was right to buy up the cryptocurrency.
Horsley also believes that individuals already holding a large amount of the cryptocurrency might be behind the recent surge. He, however, noted that volatility is one of the characteristics of cryptocurrencies as they have demonstrated in the past. It is therefore difficult to pinpoint the actual cause when it happens. The Bitwise CEO also believes that the recent surge, particularly that of Bitcoin, may have been the result of Bitcoin crossing the $4,200 price range. The price level is considered a vital technical level and a stop loss trade may have been triggered.
As far as the sustainability of the price is concerned, Horsley believes the surge will likely be temporary if there is nothing to back it. This means that the price might also drop, but he did not rule out the possibility that the recent Bitcoin surge might also signify the start of a more bullish market that could prevail for the rest of 2019. Ultimately, cryptocurrency market performance has proven to be highly unpredictable, and investors will, therefore, observe which way the market will steer in the hopes that they will be favoured.