Bitcoin Prices Increases By 15 Percent Without Warning, Reaching US$5,000 Mark On Bitstamp
Without warning, Bitcoin suddenly went bullish at the start of the week, briefly breaching the US$5,000 mark on some online cryptocurrency exchanges. The rise was preceded by months of low volatility and no major shifts in either direction. The largest and the main cryptocurrency that is used worldwide has been known for its extremely large movements. However, the immediate cause for the upward shift this week is still relatively unknown.
On Tuesday, Bitcoin had bounced up by more than 14 percent, reaching US$4,766 by the end of the day. This had marked its highest value since November of last year. Since its significant drop last year, the value of the block chain-based cryptocurrency has been hovering between US$3,000 to US$4,000, with most of its time spent on the bottom end of the range.
In exchanges like the Luxembourg-based Bitstamp exchange, the price of Bitcoin had actually breached the US$5,000 mark, with speculators continually pushing it further up as they scramble for a possible breakout. According to Coin Market Cap, Bitcoin had added over US$14 billion to its market value during its climb earlier in the week. It had managed to gain that amount in less than 24 hours.
Other virtual currencies, especially those that are pegged on Bitcoin, had also risen in value. Popular altcoins or alternative digital currencies, such as Etherium and XRP also rose during the start of the week. Etherium rose by as much as 10 percent, with its value still continuing to climb. XRP rose by as much as 9 percent during the sudden breakout.
According to technical analysts, the price hike may have been caused by the sudden entry of thousands of traders who were closely monitoring the US$4,200 resistance level for a possible breakout. A senior market analyst at eToro, an online trading platform, explained that most of the market had actually been waiting for Bitcoin to breach the US$4,200 mark, which has been seen as a possible breakout point. The analyst further explained that a number of entry orders were likely placed around that area, which meant that trades were automatically triggered when the value hit that particular price.
The sudden climb comes at a time when the entire cryptocurrency market has been in a general slump. Bitcoin previously lost more than 75 percent of its value last year. Its value today, even with the sudden rise, is still way below its all-time high of nearly US$20,000 in 2017.