Bitcoin Hits $8,000 After Breaching Key Levels In Its Best Day Since December

Francisco Memoria
  • Bitcoin is currently up 10.7 percent after surging over $1,000 in only 30 minutes.
  • What's behind the rally is unclear as several factors could've helped the cryptocurrency surge.

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.

bitcoin.png

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.

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.pngBitcoin 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.

Top Crypto Trends for 2019

Cryptocurrencies are a new form of asset that are designed to work as a medium of exchange like any other currency. Bitcoin, the flagship cryptocurrency, paved the way in 2009, and now there are more than 2,000 cryptocurrencies available according to CryptoCompare. Although it’s been a decade since Bitcoin’s launch, cryptocurrency has yet to achieve mass adoption as it faces many challenges from within and without. Still, many financial analysts are confident that prices will soar as institutional investment flows in 2019 and beyond.

Cryptoassets hit an incredible peak in December 2017 when the Bitcoin price reached $20,000. 2018 however, saw prices collapse across the board as the enthusiasm of 2017 waned with failed ICOs and inactive projects.

One possible factor that contributed to the slump is that US regulators are yet to approve an ETF (Exchange Traded Fund) application. Another project that is highly anticipated to move markets is the new Bakkt Exchange, from NYSE parent company ICE (Intercontinental Exchange) which will likely herald a new era of institutional investment.

There is however a lot of positive development within the cryptoverse itself. In 2019, some new trends are emerging which observers should monitor closely, as they have the potential to foster enormous growth. Let’s take a look at some of these new positive trends.

Leaner Companies

We have seen many failed cryptocurrency projects in the last 2 years, and one reason for their failure was lack of funding. Crypto giants like Bitmain Technologies, ShapeShift, and many blockchain-based social media platforms like Steemitwere forced to reduce their staff because of the lack of investment in this sector.

These companies are the victims of the prolonged bear market, and they were forced to shelve their expansion plans because of poor financial planning and many other mismanagement issues. The new trend therefore, is for crypto startups is to cut their operational costs to survive in the crypto ecosystem. These new, leaner companies may indicate a more resilient industry in the long-term.

Scalability

Another primary issue is scalability, and it seems to still be a problem in 2019. Ethereum for example, had to postpone its Constantinople upgrade due to a serious, smart contract vulnerability threat. The update was scheduled to launch at the start of this year but was delayed  after an independent research firm detected the flaw.

There are many new projects surfacing that claim to work on improved algorithms or protocols. These algorithms and protocols are not fully developed, but promise a hybrid of proof of stake and work. Developers on projects around the world are working hard on the problems of scalability, and if progress is made, 2019 may set the stage for broader crypto adoption.

More User-Friendly Apps

The Lightning Network is seeing a great deal of activity in 2019 in its role as a second layer payment feature. Still, developers are trying to further improve the LN protocol to make it more secure, faster and cheaper to conduct crypto transactions. As work continues, the Lightning Network is turning Bitcoin into a faster and cost-effective medium of exchange. You can expect more development in LN protocol in 2019 as developers are creating more apps that are both intuitive and user-friendly. You can find the best trading software reviews here to learn more about these apps.

Security Tokens Vs ICOs

After regulatory authorities began targeting Initial Coin Offerings (ICO), Security Tokens - which explicitly acknowledge their regulatory obligations - are being launched throughout the globe.

The new name also seeks to avoid much of the negative stigma of the ICO, which has become associated with failed projects and even outright scams. Jurisdictions such as Malta, Switzerland and Singapore are more accommodating towards Security Token sales, adding to investor confidence in this newer token model.

Education

Another obstacle for the crypto ecosystem is lack of educational resources. More efforts have been made recently to make crypto education more accessible. New York University for example has taken the initiative by introducing a graduate level certification in digital currencies. Now that prestigious institutions such as NYU and the London School of Economics begin to spread the word about cryptoassets, the industry is further cementing itself in the public consciousness.

The Availability of Bitcoin ATMs

2019 may see the introduction of Bitcoin ATMs in several major cities in the United States.

With 30 new machines installed in Chicago, and over 100 in Philadelphia, prospects are looking good. These new ATMs are solely for Bitcoin transactions, but some regular ATMs in New York are now also offering crypto services. These new services require an account with  Bitcoin payment provider LibertyX, and users can purchase up to $3,000 worth of Bitcoin daily using a debit card.

Conclusion

Cryptocurrency looks set once again in 2019 to gain traction. While the industry is young, and in many ways still recovering from the spectacular boom and bust of 2017 and 2018, it still inspires a great deal of enthusiasm and interest globally. These trends in 2019 will be closely watched.