Last week was a decent time to have Bitcoin in your wallet – and let’s face it, we haven’t said that much in 2018.
For hodlers (which, in case you didn’t know, is the once-jokey term – first seen here – the cryptocurrency community awards anyone who buys and ‘holds’ on to coins even as prices fluctuate) every day is a good day to have Bitcoin in their wallet – and bless them for that. They don’t care about the micro events seen in any period as trivial as a week – as interesting as they may have been – as they’re in it for the long term, confident the graph lines will ultimately keep rising.
Traders and users of Bitcoin, on the other hand – especially those who got onboard in Q3 or Q4 of 2017 – got a little bit of relief from the weekly doom-and-gloom they’ve seen in Q1 as the BTC price began to show signs of recovery from the losses of 2018 so far. It now seems to be working it’s way back towards the highs we saw at the end of the 2017 and the very early weeks of this year. There’s still a long way to go, but this was better.
Getting a handle on what’s going on with the Bitcoin market is a tougher proposition than just being pleased about things looking a bit greener on the charts than they have of late, though. Bitcoin’s week was pretty crazy; defined by a trio of seemingly unexplained leaps in its value.
The biggest of these came in one hour between 11am-12pm UK time on April 12th, where BTC took a nigh-on $800 jump upwards to get back above the $7000 mark for the first time since the back-end of March. This price increase came alongside the kind of trading volumes that the cryptocurrency hasn’t seen since the almost mirror-image drop took it below $7k. That was the beginning of a trough that eventually bottomed out at a three-month low of $6635 on April 6th, before picking up since then.
Just to offer some perspective on all of this, it’s worth pointing out that – should you be wondering – the six-month BTC low came on October 24th of last year, when it briefly sat at $5513. If a week can seem like a long time in the world of cryptocurrency, six-months is an age. There are a lot of crazy weeks in the world of Bitcoin, last week was just one of them.
Take an even wider view and you’ll see that on April 17th 2017, Bitcoin was sitting at (wait for it)… $1,194. Things ain’t so bad, then… even for those who kept their finger off the trigger when the race to $20,000 warped everyone’s perspective for a while.
Long story short: if you bought BTC instead of an extra few easter eggs last year, you’re doing very well. Headlines are headlines, however, so it’s been easy to lose track of just how good the last 12 months have been been for investors in the sector, all told.
Anyway, back to the last seven days, where there were other notable spikes during the week. The second, came in the form a $200 leap on April 13th that finally got BTC above the $8000 mark again. The final jump came April 15th, again around midday, and established a plateau that would top out at the weekly high of $8,409 on the 16th. The prices dropped back in line with previous levels in both cases, with gradual rises following each.
So – and this is very Bitcoin – the trend is generally up, with unusual anomalies in both directions.
What’s causing these spikes in trading, then?
Well, those looking for cause and effect have pointed to news that cryptocurrency, and specifically Bitcoin, has seen a couple of approvals with regards to Sharia law in the last seven days, reports of which could have encouraged trading among Muslim investors around the world.
US Tax Deadline
Others looked at the US tax deadline – which is today, April 17th – and blamed the complicated issue of paying the right amount on crypto assets as being responsible for suppressing prices over the past couple of weeks. They then reasoned that the encouraging leaps could be a sign that, as many people finally got around to filing, their concerns about investing in crypto in general were on hold for another year.
The fact remains, though, that – at least according to Cryptocompare – the majority of trading in Bitcoin (59% of it) over recent weeks has been in Japanese Yen. This confirms what we know about Japan as a driver of interest in cryptocurrency, despite recent issues. So it could be worth looking to positive news about the Monex/Coincheck deal, and a general growing confidence as regulators begin to get a handle on the exchanges in Asia as a driver in growth.
The timing of the spikes – pretty much as Americans begin to arrive at and get ready for for work, depending on their time zone – is another hint that they may be what’s causing all this, however.
While all of these factors could explain the fact that the rises ultimately stuck, they don’t explain the speed of the changes. For that, we can point to automated events triggered by ‘stop losses’ set on short trades.
Put simply, people betting the price of BTC would fall got caught out, and – as is the promise of a so-called ‘short’ trade – were forced to close their positions by buying at the higher prices to sell at a loss before they were wiped out. These buys triggered a domino effect of enforced buying, until the market stabilised.
As always with Bitcoin, you pay your money and take your chances in a still-volatile market, and neither I – nor CNR – would want to be seen as offering investment advice. Yet, with the price currently sitting comfortably above the $8,000 mark, however, it does appear that some level of ‘recovery’ against the short-term losses of 2018 is underway. Apparently, where Bitcoin goes the other main cryptos go too – as most of the main ones have pretty closely followed the graph BTC has marked out over the past seven days. Ethereum, LiteCoin, Ripple and EOS have all showed similar gains in that time, with the last of those showing the biggest percentage rise in value of the lot.
All cryptos benefit from a little feel-good coming back to the Bitcoin price, though. That’s not least because – in the view of the wider public – BTC is still the ‘Hoover’ of the sector, a crypto poster-person synonymous with the concept and technology. Unless another coin can come along and make it the equivalent of the Walkman – something only people of a certain age refer to – we, and the wider mainstream press, will be talking about more crazy weeks in Bitcoin for a while yet.