The bitcoin price briefly crossed the $5,000 in several major regions on April 2, officially surpassing the $4,800 mark in global average price.
The somewhat expected increase in the price of bitcoin left many investors, including industry executives, bewildered about the factors that led the dominant cryptocurrency to surge.
Throughout the past week, CCN.com reported that the $4,200 resistance level is crucial for the near-term price movement of bitcoin and once the level is breached, there exists a possibility it leads to a significant upside movement above $4,500.
As soon as an $80 million sell wall at $4,200 was absorbed by buyers, $500 million worth of short contracts on BitMEX were squeezed out, further fueling the rally of bitcoin.
A purely technical move above a key resistance led sell walls to fall, short contracts to be liquidated, and retail investors to demonstrate fear of missing out, or FOMO, ultimately causing bitcoin to increase by 19 percent within minutes.
But, a compelling argument can be made that the bull rally is only just beginning.
According to a well-recognized cryptocurrency technical analyst and trader who goes by the moniker ‘Galaxy’, buy volumes of bitcoin on Binance achieved an all-time high.
On Tuesday, following a strong 19 percent upside movement by bitcoin, Binance CEO Changpeng Zhao, better known to the community as CZ, said that it caused the system of the exchange to overload, causing the platform to underperform for a short time frame.
“Some UI server scaling issues, affecting some users, being fixed now. API should be scaling fine,” CZ said, adding, “it was not a “try to cut server cost” issue. Parts of the system that was supposed to auto-scale didn’t. Should be better now.”
Although some investors have said that they were not able to initiate trades during the period in which Binance was suffering server issues, the exchange saw an unforeseen spike in demand after four months of low volume and stagnation in the cryptocurrency market.
The rapidly rising volume across major exchanges demonstrate that the interest of retail investors is rising once again, improving the overall sentiment around the asset class and the market as a whole.
Economist and global markets analyst Alex Krüger said that virtually every fund and family office talked about bitcoin after the asset surged by 19 percent overnight.
The price movement of bitcoin was particularly noteworthy because investors feared that following 3 months of stability from January to March, it may plunge in value as it did in November 2018.
The interest towards bitcoin and the rest of the cryptocurrency market was already rising prior to the sudden upside movement due to the involvement of Fidelity, ICE, Nasdaq, and other large financial institutions in crypto in recent months.
Throughout the past two months, both major crypto assets and alternative cryptocurrencies in the likes of Litecoin, Cardano, and Ontology recorded large gains against bitcoin in the tune of 30 to 100 percent.
Technical analysts said that the strong performance of cryptocurrencies enabled the cryptocurrency market to stay afloat despite the stagnant price trend of bitcoin.
The upside trend of bitcoin could significantly boost the confidence of existing investors in the cryptocurrency market in the near-term.
In synergy with the price trend of cryptocurrencies, the cryptocurrency industry has seen progress in areas that needed much improvements such as institutionalization and merchant adoption.
In the past two weeks, the largest e-commerce platform in Switzerland accepted cryptocurrency payments and a luxury Swiss hotel integrated cryptocurrency payment methods.
Last modified: March 4, 2021 2:43 PM