Bitcoin is popular for its quick upward spike as well as the downward crash since its inception in 2009. Bitcoin has undergone many sudden moves in the last couple of years.
As always, other digital currencies follow the moves of Bitcoin. However, the current price increase which happened on the 2nd of April may seem a little different.
Absolutely, there’s no news like a large scale adoption, the launch of Bakkt, approval of Bitcoin ETF or anything like that, which could lead to a huge population entering into the market and drive the price upwards. Rumours also suggest that a single trader was behind the sudden price rally as he purchased more than 20,000 BTC via three different exchanges by using trading bots after reading an April fool’s day article posted on some websites.
Bitcoin Bull Conspiracy?
While some analysts have begun to believe that the bearish market has finally come to an end and bulls are back to action, and bitcoin will soon reach to $6000 mark, other major analysts are warning investors about the risk of trading in such a situation.
A recent article on Bloomberg said that the sudden price surge is a blip, and investors should simply ignore it.
Bitcoin crashed to near $3100 in December last year, whereby it began to correct upwards. However, the major correction began this year in February when the Bitcoin price was around $3350 and corrected to around $3900.
At the end of March, the price touched the $4100 mark reaching up to $4150. The overall increase in the two months was around $800 in total. However, on April 2nd, Bitcoin spiked up from around $4100 to $5100 that is a massive $1000 increase in just 24 hours. This is $200 more than the price increase in the two months combined.
Various Other Possibilities
In case the rumours about the single trader reading fake news and buying 20,000 BTC is correct, it may just have an adverse effect on the overall market as the trader may just sell the same amount of Bitcoin after recognizing the truth about the April Fool’s day article.
The sudden price hike created a feeling of confidence among most cryptocurrency enthusiasts as their thoughts, all of a sudden, turned bullish and everyone began to buy which even spiked the price up to $5350 yesterday.
The Volatility of the Market
The digital currency market is highly volatile and is run mostly owing to the emotions of the enthusiasts and traders who believe in the future of Bitcoin. The increase in price when there’s massive adoption, launch or regulation of a large product may be termed as genuine. However, a sudden increase in the price with no reason behind it may be termed as a conspiracy as the person, group or institution of institutions who were behind the sudden increase would surely have a profit earning theory at the back of their mind.