Foreword: The soaring cryptocurrency yesterday made everyone very embarrassed, and many people attribute it to the factor of April Fool’s holiday news. So, what other more important reasons? The author of this article believes that the soaring of Bitcoin is related to the reasons for the initial issuance of tokens in the past exchanges and the rise of some tokens. However, it is still impossible to explain why such a big change has occurred overnight. Some people think that the United States has stopped raising interest rates, and countries have released water to stimulate the economy, but the French currency can not enter the housing market, and can only turn to the stock market and the blockchain enterprises for record reasons. This article is not intended as a recommendation for any investment decision, just to explore the possible reasons, and welcome comments. The author of this article, Frank Chaparro, is translated by the "SL" of the Blue Fox Note Group.
Bitcoin has dramatically exceeded $5,000, reaching its highest point in nearly five months. It made financial media and analysts a bit embarrassed on Tuesday morning as they were trying to find the driving force behind it.
One of the most widely circulated theories is that it is related to the April Fool's Day article by Rachel Mclntosh on Finacial Magnates. This is a false report of the scene, released one day before the bitcoin price soared, claiming that the SEC approved an elusive crypto exchange-traded fund. Bloomberg reported on Tuesday morning that the "April Fool's Day" joke may be the trigger for the cryptocurrency rally.
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But after carefully studying the K-line chart last night, it can be seen that the world's largest price increase in crypto assets is not a joke.
First, let's take a look at the fundamentals.
For cryptographic assets, the situation last year was complicated. Most of the institutional capital that everyone is waiting for is in a wait-and-see state, and vigorously promotes the trading business, including the Bitcoin trading counter of Goldman Sachs and the futures platform of Bakkt, but the thunder and rain are small, and they have not really realized. At the same time, the first token crowdfunding (1CO) basically disappeared from the market.
Despite this, the momentum of the market has recently begun to change. Some IEOs initiated by crypto-exchanges have begun to have an impact on the market. Earlier today, VeriBlock's IEO was robbed in 10 seconds on Bittrex in the United States. Prior to this, the currency security and fire coins also launched the IEO platform. The IEO phenomenon has the ability to trigger a shift in market sentiment.
This trend occurred overnight. The market with small liquidity was short, the shorts were liquidated, and various brokers hedged the short gamma position. BitMEX's liquidation of leveraged shorts reached $500 million. Like many rebounds in the market in 2017, many altcoins lag behind BTC because market participants are trying to capture the price momentum of BTC. Tether inflows soared, and it generated a short premium ($1.03) on the $1 redemption price. This suggests that traders may be looking for a safe haven for last night.
The short-term market rebound is also affected by other high-beta assets such as LTC and BNB, which have reached their highs in recent months.
From a technical perspective, we saw Bitcoin break through its 200-day moving average last night. This is a technical indicator that shows that a particular asset is in a bullish trajectory. At the same time, market observers see bullish signals in other markets, which may indicate a cross-asset capital flow when traders turn to risky assets. Reuters pointed out that the so-called golden cross was triggered for the first time since 2016, pushing the US stock market and emerging market price bullish action.
In addition, the volume of transactions in the past month has been steadily rising, making the crypto exchanges relieved. Although bitcoin prices have stabilized, the volume of transactions has continued to grow rapidly since last night, further showing the strength of this rebound. According to Coinmarketcap data, the revenue of the encryption and encryption office increased from $44 billion to $63 billion overnight. This figure is five times higher than the beginning of the year.
At the same time, the bears lose momentum – at least the perspective of two large over-the-counter counters. “In the past few weeks, some degree of complacency and short-term positions have made the market vulnerable to explosive growth.” This is mentioned in a report written to customers by Mike Novogratz's encrypted commercial bank Galaxy Digital.
Well-known investors, such as global macro trader Mark Dow, a well-known bitcoin skeptic, who had successfully sold short at the market high in 2017, began to reappear yesterday.
This rebound can also see the return of famous anonymous cryptocurrency traders like Parabolic Trav. In the past few months they have not been moving, and this period is also considered by many to be the most serious encryption during the winter season.
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