What are the reasons for recent crypto rally?
What are the reasons for the recent change of trend in Bitcoin price?
The sudden jump in the price of Bitcoin, and many other cryptocurrencies (just to mention ETH, XRP or the biggest winners as Bitcoin Cash or Litecoin) was a surprise to many people who are interested in investing in cryptocurrencies in 2019. But what are the possible reasons behind such drastic advances?
Is cryptocurrency conspiracy theory possible?
At the end of March 2019 coinmarketcap.com website (one of the most popular websites showing cryptocurrency prices and daily BTC trading volume) was blamed for manipulating the trading volume and market capacity of crypto markets. As a response, shortly after there had been introduced two more metrics and changes in compiling cryptocurrency data. Ensuring accuracy of the data could have potentially changed to some the mind of crypto investors, what could be a part of the beginning of rally?
Had cryptocurrency investors been simply tired of Bitcoin bear market?
As we have been claiming on the number of forums where we do have profiles (like cryptocurrencytalk or quora), each Bitcoin price cycle (bull market – with BTC price going up and bear market – with BTC price going down after it) is getting longer than a previous one. Considering that, many investors could have reasonably estimated, that the last bear market had already been few months longer than the previous one. They simply got tired of seeing the price of Bitcoin remaining near $4000 value and decided to change the market.
What is the influence of Bitcoin whales on the cryptocurrency market?
In cryptocurrency environment, there are not only individual investors (like the majority of people who buy BTC online with Linkkoin) but as well as big companies, like crypto investment funds. They are known as whales – and at some critical moments by buying and selling the bigger amount of a specific cryptocurrency (like 20 000 BTC on few exchanges at the same time what we observed just a couple of days ago), their influence on the price can be much bigger. If the trading volume is low, for a short time they can stop a price change, boost or even change the trend.
Can cryptocurrency algorithmic trading be the one responsible for that?
Not only human beings can trade cryptocurrencies. Skilled software developers are capable of creating automated software to detect trends and place trades automatically (by detecting when the price is low and high and opening positions based on such factors as moving averages, trading volume and other trading indicators good for cryptocurrencies). Or alternatively – even mock some short term trends (especially when speaking of whales) to make the profit at the expense of those investors who fall for that. Please be aware that not all of them are trustworthy!
Any other possible reasons?
According to Bloomberg, the unclear situation regarding Brexit as well had some impact on the recent cryptocurrency rally. The uncertainty of its conditions and issues caused to the British companies could persuade the number of traders to sell their GBP and buy Bitcoin online instead.