Bitcoin Analysts Explain
Save for a few soothsayers, this move caught many traders with their pants down. In fact, crypto Youtuber Sunny Decree recently joked that he recently made the “worst trade since [he] got on Youtube”, as he shorted $4,200. The fact is, there wasn’t a clear fundamental catalyst that drove this move. Sure, fundamentals for the ecosystem have recently been booming, with there being continual macro factors, institutional announcements, and technical developments that have been an underlying boon for the industry. But, many are sure that Tuesday’s move, which brought BTC from $4,150 to $4,650 — a move of ~14% — was a result of pure technicals.
In response to a comment about the sentiment that CNBC is going to cover the crap out of this Bitcoin news tomorrow, industry trader The Crypto Dog explained that this move was simply price seeking liquidity. With there being relatively little volume, as seen by the lack of a large green candle below, this might not have been the ‘whale buy order’ that some looked to.
And once $4,200 was breached, there was little friction in the order books in the mid-$4,000s, in spite of there being important resistance zones in that region. Thus, a short squeeze, or “cascading liquidations” as The Crypto Dog called it, perpetuated Bitcoin’s brief spike to $5,000+
Crypto Industry Over The Moon (Literally?)
As a result of this move, crypto investors have been over the moon. Jeet Sidhu joked that “life is good” minutes after BTC started to rally. WhalePanda posted a cheery “Anchorman” GIF as BTC surmounted $4,600. And by and large, cryptocurrency stakeholders expressed buoyant sentiment, as they realized that the market could finally begin a recovery. Title Image Courtesy of Andre Francois Mckenzie Via Unsplash