The price of Bitcoin has blasted off over the last 24 hours as a flurry of buying saw the asset’s price skyrocket up to $5,000. The spectacular move came off the back of no significant news being released in the crypto space, and a number of major trading positions were liquidated in the market as a result.
It seems this move was driven purely by spot buying pressure entering the market and taking the price through key technical levels of resistance. The key levels breached include the $4,200 resistance that has held since the major sell-off in November last year and, more importantly, the 200-day moving average, which is around $4,700.
“Today’s spike in Bitcoin’s price was caused by more people buying and holding.”
– Samson Mow
(Media, feel free to quote me in the articles.)
— Samson Mow (@Excellion) April 2, 2019
The initial move up took Bitcoin to well over $5,000 on most major exchanges, but price has since corrected back down from its FOMO top. It looks like the price may now be finding some support at Bitcoin’s 200-day moving average.
What if the 200-day moving average holds?
If price can hold and most importantly achieve a daily and then weekly close above the 200-day moving average, it could be a signal that the $3,100 bottom may hold and the crypto bear market may even be over. At the moment, it seems the institutional rhetoric is that they are still waiting to ‘buy the dip’ (with money still on the sidelines), but if the price can continue to find support above this historically important indicator, then we may see the next major level of $5,800 and then $6,000 break sooner rather than later.
Half a billion dollars in liquidations
The major margin exchange BitMEX saw over half a billion dollars worth of positions liquidated during the move up to $5,000. This is a huge amount of people who have been ‘rekt’ given that the the open interest on the perpetual swap contact is around $2 billion at the moment.
— Edward Morra (@edwardmorra_btc) April 2, 2019
Given that BitMEX seems to be the destination of choice to easily get that special combination of liquidity, leverage, and somewhat reasonable fees, this record amount of liquidations is what many predicted would happen in the event of a possible break up in price for Bitcoin.
What about the alts?
Interestingly, unlike recent upward price movements we have seen since the December lows, on this occasion it was Bitcoin leading the charge, as other assets like Ethereum and XRP have seen only single-digit gains. Other big moves among the large-cap altcoins were seen for Litecoin, Tron, and EOS.
With Bitcoin now back above $80 billion in market cap following its near instant $5 billion appreciation in market size this morning, many will continue to search for the inevitable “Why?” over the next 24 hours.
When the answer comes back that there is no major reason whatsoever for the price spike and many realise there’s a chance they may have now missed ‘the dip’, I wonder how all that money on the sidelines will react during the next pullback in prices?