The price of the leading cryptocurrency Bitcoin has gone past the $5,000 mark for the first time in five months, with analysts and famous figures in the crypto space giving different reasons for the recent surge in price.
BTC Crosses The $5,000 Mark
Bitcoin finally overcame the bears to post a daily gain of roughly 20%, with the cryptocurrency smashing the resistance level at $4,200 to reach the $5,000 mark. The price increase took place on April 2nd and set a new high for this year.
By surpassing $5,000, Bitcoin ended the day trading above its 200-day moving average. The recent spike has led to some investors becoming optimistic about the cryptocurrency, with some of them expecting it to reach the $6,000 target very some while some are still wary that a drop to roughly $3,000 needs to happen if we are to see the bottom.
There have been many reasons given by analysts and market experts regarding the recent price increase. CNBC pointed out that the rise was caused by a mysterious order of 20,000 BTC spread across Coinbase, Kraken, and Bitstamp crypto exchanges on April 1. This trade led to the market gaining $14 billion within a few hours.
Pompliano was excited about the price increase. The co-founder and partner at Morgan Creek tweeted that Bitcoin is back following this recent development.
Samson Mow, the CSO at Blockstream and the CEO of Pixelmatic is of the view that the price surge was mostly caused by more people buying the cryptocurrency and holding it.
Crypto Dog, one of the most popular cryptocurrency analysts on Twitter with over 10,000 follower, explained that the price increase was due to liquidation. The analyst noted that “Price sought liquidity. There was relatively little volume on that whole move. Once we passed ~4200 there were so few orders in the books it was a quick gap up. Cascading liquidations made sure it happened quickly.”
Another possible reason could be the successful ATM Bitcoin payment made via the Lightning Network. Late last month, researcher Felix Weiss carried out the first successful ATM Bitcoin transaction on the Lightning Network. This latest development was an important one, with Weiss describing it as “Just a proof of concept ‘top up your existing channel.’ Lots of bugs but two different mobile wallets worked fine.” Lightning Network has long been touted as the solution to Bitcoin’s scalability problems and helps it gain massive adoption.
Brian Kelly, the CEO of BKCM LLC told CNBC in a recent interview that the recent increase above the $5,000 was just beginning and expect the cryptocurrency to surge higher very soon. He stated that the recent spike is interesting because fundamentals are improving and institutional sentiments on Bitcoin are becoming positive.
Fake Trading Volumes Cast Doubt To The Recent Rally
While there is excitement amongst crypto enthusiasts, it is worthy to note that
In another report last year, the Blockchain Transparency Institute (BTI) published a report revealing that the global crypto exchange market fakes around $6 billion trading volume every day. These conclusions were reached after the researchers evaluated the user activity and traffic recorded by the biggest crypto exchanges and compared the result to the trading volumes reported.
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