Bitcoin prices skyrocketed today, soaring almost $1,000 in one hour. And a question on everyone’s lips is why?
There appears to be no obvious reason for the large move, but traders are speculating about what may be going on.
A narrative that big money is manipulating Bitcoin markets continues to hold traction. What’s more, more bitcoin changed hands during this one hour than at anytime in Bitcoin’s history with $1.2 billion trading volume.
Quarterly futures contracts on OKEx totalled 1,313,000 before the rise, worth around $131 million at the time in what one Twitter trader called the “largest ask” he had seen.
Bitcoin’s weekly price chart also indicates the cryptocurrency may have found support at its 50-week moving average.
Another theory is short sellers were responsible for the spike. Once Bitcoin crossed the $7,000 mark, that might have triggered a buying surge.
Regardless of the reason, the bull market quickly spread to other cryptocurrencies, furthering the volatility for which the market is known.
Two people active in the cryptocurrency market said the biggest moves in trading of bitcoin had occurred on the Bitfinex exchange before spreading to other platforms.
“People overshorting on Bitfinex so bit of a squeeze there,”
said Charles Hayter, founder of cryptocurrency analysis website CryptoCompare.
Sentiment towards cryptocurrencies has improved in recent days and prices were consolidating, which can lead the price to suddenly “explode” higher, said Naeem Islam, an analyst at ThinkMarkets who owns and trades virtual currencies.
Quarter 2 never disappoints
BTC has registered gains in the second quarter every year – the highest being 1,964 percent in the Q2 2011 when bitcoin jumped from $0.78 to $16.1.
The 131 percent gain reported in Q2 2017 is the second highest on record.
The reasons for a bounce in Q2 might be twofold: first, the tax-selling season that pressured prices at the end of the first quarter is now winding down, and second, regulatory fears that also squeezed cryptocurrencies since the beginning of the year are beginning to fade.