Bitcoin (BTC), the flagship cryptocurrency, recently surged over $1,000 in about 30 minutes, after it broke past key levels, according to analysts. The rally saw bitcoin surpass the $8,000 mark, before falling back to $7,700 at press time.
Bitcoin’s surge saw the cryptocurrency mark add roughly $30 billion in a short amount of time, as most cryptocurrencies followed suit on its rally. Bitcoin is now up 10.7 percent in the last 24-hour period thanks to its recent rally.
What’s behind the cryptocurrency’s surge is somewhat unclear, as several factors could be behind it. Some analysts claim bitcoin’s stability allowed it to break through the resistance at $7,000, which then allowed it to surge to $8,000.
Others claim institutional investors finally started buying cryptocurrencies. As covered, $8 billion legendary investor George Soros, along with the Rockefeller family through its Venrock venture capital fund, are entering the cryptocurrency space.
Cryptocurrency analyst “Crypto_Ed_NL” had a different theory. On Twitter, he claimed he believes bitcoin’s price is dominated by whales and market makers, who manipulate it to make as much profit as possible.
IMHO BTC price is dominated by Market Makers and whales. They manipulate the price into the direction which gives them easiest profit. Pushing BTC up form here will create a shorts squeeze.— Crypto_Ed_NL (@Crypto_Ed_NL) April 11, 2018
They tend to operate against the logic, what whole market is expecting. Its a possibility
Per his theory, they could’ve pushed bitcoin’s price up to create a shorts squeeze, which would further help bitcoin’s bullish rally as traders holding short positions could panic and buy more bitcoin to sustain their positions and avoid liquidation.
Available data shows this could be the case, although a lot of positions seemingly got liquidated as well. The shorts squeeze could, in fact, have been accidental as institutional investors enter the market. Speaking to Bloomberg, Cryptocampus analyst Jeffrey Van de Leemput revealed he recently “helped set up a 200k btc transaction for Chinese buyers.”
Bitcoin shorts on Bitfinex
The squeeze could’ve also been triggered by a large amount of new buyers entering the market, as an Islamic scholar recently declared the flagship cryptocurrency compliant with Sharia Law. Given that nearly one-quarter of the world’s population is Muslim, the scholar’s conclusion could see bitcoin’s adoption enter a whole new level.
Going forward, analysts believe bitcoin will need to hold above the $7,500 mark before it can keep on climbing back up to its mid-December all-time high of over $19,000. If the cryptocurrency holds above that mark, the next rally could see it hit $9,000.