The Bitcoin market has in the second quarter of the year pulled a surprising bull run, with the last seven days seen as a week of drama, record-breaking, to and fro movement and a slight fall from the weekly high. The previous trading week was full of anticipation of Bitcoin breaking its resistance price level of $14000 but to no avail.
With a massive momentum garnered over the months to cross into the five digit price point, investors and traders had a high expectation of the last trading week, expecting Bitcoin to hit and probably outrun its all-time high of near $20,000, but what happened?
Let’s quickly analyze the weekly performance of the Bitcoin Market.
Bitcoin Sets Two Records in The Last Trading Week.
In the last trading week, Bitcoin hit two different all-time highs since January 2018. On 26 June 2019, Bitcoin recorded a trading price of a little over $11,800 on 00:06 (GMT), for the first time in 17 months. The last time Bitcoin hit or crossed that price point was 29 January 2018, when the digital asset was trading at $11,775.
Bitcoin also recorded a market capitalization of $231 billion for the first time since 14 January 2018, when Bitcoin was trading at a little over $14,000 with a market cap of $231 billion. The figure increased to $232 billion on the next day followed by a considerable decrease in the subsequent months.
Interestingly, the last trading week saw Bitcoin recording the highest trading volume in its history with a value of 46 billion on 27 June 2019. Also, Bitcoin recorded another price point of $13,755 on 26 June 2019 at 7:06 PM GMT in the last trading week. That was its weekly high and the first time it tested that price point in 17 months. The last time we saw that price point was on 16 January 2018, when Bitcoin was trading at a little over $13,800.
Though the latter days of the week saw a slight decrease in the price of Bitcoin, the market performance for the week is still a success. The lowest trading volume in the last seven days was 26 billion on 30 June 2019, right after recording its highest volume of 46 Billion on 27 June 2019.
The positive run of Bitcoin had a spillover effect on most of the Altcoins with Litecoin crossing $130, and Ethereum, Bitcoin Cash and XRP following with a good price gain. According to analyst Simon Peters, from a popular crypto broker eToro, the performance of Bitcoin in the last trading week will continue with Bitcoin expected to hit $20,000 by the next two weeks.
More Drama in the Last Trading Week
As stated earlier, the week was full of drama and to and fro price movements. In the last trading week, Bitcoin recorded a percentage growth of -10% according to data provided by CoinMarketcap.com. Not just that, Bitcoin also took a significant fall in price to touch $9775 to record its lowest price in the last seven days on 2 July 2019.
The last time Bitcoin traded within the $9000-$9999 price zone was on 21 July 2019, when Bitcoin hit a little over $9500. Few hours after falling to this level, Bitcoin bounced back into the five digits price zone.
Some Reasons for the Impressive Weekly Run
The sudden bounce back of the Bitcoin price, trading volume and market cap is not a result of random movements on the price curve, but a response to a positive movement of one or more of its price determinants. Hitting the nail right on the head, one leading theory that provides a reasonable reason for the price surge is the Bitcoin Halving Event scheduled to take place in May 2020.
The Bitcoin halving is the splitting of the block mining reward into two. The halving event takes place every four years, and it is marked by an unprecedented market bull run of the Bitcoin price, mostly a year after the event. This event will see the Bitcoin block mining reward being divided into two.
Bitcoin recorded a new all-time high in 2013 right after splitting the mining reward from 50 to 25 in 2012. In 2016, another halving occurred which saw the block mining reward being split from 25 to 12.5. A year after this event, Bitcoin recorded its all-time high of near $20,000 in December 2017. In May 2020, the next event is scheduled to take place. The much anticipation of the price rising to the moon after the event has possibly increased the demand, which sent the price high in the last trading week. This makes sense in the theory of demand and supply.
One determinant of demand is the anticipation of a future price increase. The expectation of future price increase causes consumers to buy more of the product before the price surges. Naturally, the price rises after every halving event. This is because the total number of miners decrease with the decrease in mining rewards, and this logically decreases the supply and in return causes the price to increase with increasing demand.
Another reason that contributed to the positive growth of the Bitcoin trading week is the high level of optimism surrounding the cryptocurrency industry following the recent trend of Facebook partnering with Uber, Paypal, and other organizations to launch its cryptocurrencies. According to Lukman Otunuga, research analyst at FXTM, the drama surrounding the Libra coin increased the appetite for Bitcoin, which in return caused the price to skyrocket.