The market experts and researchers cited various reasons for the initiation of the bull run on the 2nd of April 2019. Reports of a ‘whale buy order’ of $100 million that initiated the bull run flooded the crypto-markets yesterday. Moreover, the infusion of buy volume was essential for the rise as well, since there was no news driving mass euphoria.
While Bitcoin rose massively on 2nd April, the first bullish candle initiated was expected to be a bullish Marubuzo on the 4-hour chart. However, after recording a high of $5121 it dropped immediately. The opening and closing of the candle were $4177 and $4699 respectively. Hence, it is evident that there was significant sell-off at the peak.
More Number of Buyers Than Sellers
The market was in an indecisive mood for the next few sessions as it traded around $4700. However, the buying pressure surpassed the selling pressure as the market continued to rise back to $5000 levels. The closing at the end of the day was above $4900. Hence, the Marubuzo completed on a daily scale which was followed by a rise on the next day as well.
Arca Chief Investment Officer Jeff Dorman, a former trader for Lehman, Merrill and Citadel told CNBC that:
“The large magnitudes of the moves in crypto make it more interesting of a story, but it’s not that different than any other asset class,” Dorman said. “Buyers outweighed sellers, and market makers felt the pressure so they took their markets higher, which triggered stop losses and liquidations, which added more buy pressure.”
This particular rally was caused by a “simple” imbalance of more buyers than sellers he further added. Moreover, the fact that cryptocurrency traders are looking forward to an upside in Bitcoin and the cryptocurrency markets also creates an inherent fear that builds FOMO with every rise.
Bitcoin had been trading near the $4000 range for an extended period. While traders were apprehensive of a bottom, the ‘Hodlers’ refused to sell their holdings. The lowest price of Bitcoin in March on Coinbase was $3672.
No Trade Zone
Bitcoin recorded gains of more than 20% in a single hour frame after months of bearish pressure. Moreover, there wasn’t any particular news that triggered the action suggesting things haven’t changed much since last month. A shooting start was also observed on the daily scale on BTC/USD.
Moreover, Dorman also cautioned the traders the market sentiments in such situations is very feeble. Hence, a drop of the same proportions from $5000 can trigger a vast sell-off from traders looking to buy the asset cheaper.
Dorman also mentioned that,
“The fact that every small dip has been bought immediately in the last few weeks shows that investors are not scared of sell-offs, they are hoping for them so they can buy more,” he said. “This certainly raises the near-term floor, but this sentiment can change on a dime too.”
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Nivesh from Engineering Background is a full-time Crypto Journalist 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