Bitcoin moved above the USD 8,000 mark yesterday for the first time since March after a bearish run and today jumped nearly USD 400 in an hour.
Bitcoin is currently hovering just above USD 8,000 (2pm UTC), representing a 17% gain since this time yesterday. The cryptocurrency topped out at USD 8,011 on Coinbase yesterday and against some analysts’ expectations, has maintained these recent price gains. According to Coinbase, Bitcoin moved through some volatile trading, reaching a low of USD 6,786 on Thursday morning.
The sharp rally was reportedly fueled by the unwinding of short trades (also known as short liquidation). The rise confirmed a double bottom bullish breakout backed by strong volumes encouraging buyers back into the market.
BTC margin shorts on Bitfinex stood well above December 2017 highs and volume analysis suggests that the rally is here to stay. Yesterday, the total trading volume across all exchanges topped USD 8 billion according to CoinMarketCap. Exchange platform Bitfinex registered a two-week trading high.
Cryptocurrencies have been under pressure over the course of the year, due in part to pending government regulations in the virtual currency environment and tax considerations. According to David Johnson, CEO of Latinum, another factor was the Mt Gox trustee’s sale of hundreds of millions worth of the digital currency. He added, “I believe the surge in Bitcoin price is connected more with decreased selling pressure than anything else.”
Another theory on the Bitcoin revival is the current global geopolitical situation with US tariffs threats on China and the threat of military action by the US in Syria, both events tempting Russians and Chinese to secure assets in Bitcoin.
Bitcoin investors had been bracing themselves for a market sell-off after it was announced at the beginning of April that US households could owe USD 5 billion in capital gains taxes for crypto holdings.
Recent developments regarding big players entering the industry such as George Soros and the Rockefellers are often viewed by commentators with a degree of positivity for the future of virtual currencies. Billionaire trader Tim Draper made his 2018 Bitcoin prediction in the last 24 hours, suggesting a coin value of USD 250,000 by 2022.