Bitcoin [BTC] has broken a lot of resistance since the beginning of the month. The most important levels included $6000, $6400, $7000, $7500, and then finally $8000. Bitcoin opened this month at around $5300; that corresponds to a rise of 55.5% in a span of two weeks at the high recorded yesterday on 13th May 2019.
The CME Bitcoin volume of the Bitcoin Futures market exceeded $1 billion for the first time, it was more than twice the spot volume on Binance, the largest cryptocurrency exchange. Hence, a lot of the price movement is influenced by the futures market and the OTC (Over-the-Counter) markets existent in China and Japan.
Tim Seymour, Bitcoin investor, and analyst noted in a CNBC interview this morning,
“There is not a volume going through making this move. But if you’re gonna bet on one name in crypto, you’re gonna bet on Bitcoin.”
While the fundamentals around Bitcoin like the daily volume on Exchanges and on-chain volume doesn’t provide a plausible explanation for the rise. The US-China Trade War and the stock markets plummeting might have had the people thinking that Bitcoin is a safer haven for now.
Karen Finerman added her views on the reason for the rise,
“One of the theories out there is people in China looking to get their money out and Bitcoin is a way to do it. So if you have a big demand and not a lot of sellers, you get a big move here.”
Bitcoin has out-performed most traditional assets in 2019. While the year-to-date (YTD) return on oil, the S&P 500 and gold is 36%,13%, and 1% respectively, the return from Bitcoin around 110%. Moreover, as the Chinese are supposedly looking to hedge their risks against yuan, the US citizens also might be flocking to Bitcoin as the US stock are down as well.
Dan Nathan added in the interview,
“The fact that it is acting opposite to the stock market right now, I think it is pretty bullish.”
Guy Adami who has abstained from Bitcoin as a trader shared his analysis from a technical point of view. He said:
“$6000 level which was support for some time has turned into resistance. So Support turns into resistance. That chart looks extraordinarily good.”
The total market capitalization of Bitcoin is 59.7%. The speculative nature around Bitcoin [BTC] has been harmful in the part.
Nevertheless, the de-coupling of Bitcoin and altcoins anticipated by the cryptocurrency traders has finally occurred. Furthermore, it has only favored Bitcoin Hodlers for now. The less used altcoins are not taking part in the rally. It marks an opportune moment to get rid of inferior altcoins which are clogging the market.
Do you think the big move will be followed by a bigger more? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com