www.varchev.com

The reasons behind the crypto rally remain unclear

Rating:

12345
Loading...

Bitcoin, the biggest cryptocurrency by market share, seems to have finally returned to life after experiencing a real collapse in 2017, which continued in 2018. Just a few weeks ago, Bitcoin traded below $ 4,000. It is currently over $ 8,000 and does not give any signs of a slow down. The other crypto assets also followed BTC, including Ethereum, XRP, Bitcoin Cash, EOS and Litecoin.

Investors, however, who are familiar with this highly volatile digital asset, believe the last leap will be short. But what could be the reason behind the sharp upward movement?

The Trade War

It is speculated that one of the reasons is the escalation in the China-US trade relationship, and this plays a key role in getting investors currently attracted to the BTC. Risk-off sentiment on shares may have catalysed "revival," as against the backdrop of Bitcoin's accelerated growth, stocks suffered losses.

According to Lars Seier Christensen, former CEO of Saxo Bank and Concordium founder, there may be a real correlation between commercial tensions and growth in digital asset prices. He also points out that investor activity is on the rise and resembles that of the late 2017. But he remains skeptical about the current jump in BTC's price. And unlike many, Christensen does not perceive Bitcoin for Gold 2.0.

Again a fight between bulls and bears

Alex Mashinsky, CEO of Celsius Network, takes a different stance on the issue. He believes that the recent activity is again due to a "fighting" between bulls and bears. He exemplifies the slight skirmish he had on April 1, 2019 when $ 500 million short positions were wiped out within a few hours. It is currently experiencing a new, yet strong demand for digital assets and the flow of fresh capital from all over the world, which also strengthens the FOMO effect.

Others attribute the rise in price to the fact that large players are already very interested in digital assets. According to Alex Frenkel, VP at Kin, technology giants such as Facebook and IBM are behind this rally.

Whales playing again?

Per Wimmer, a former Goldman Sachs banker and founder of the London-based Wimmer Financial LLP, has previously suggested the current digital asset rally.

"Crypto markets are dominated by ten whales, they have a huge resource on the market and can trade huge volumes, so if you remove the top 10 or even 50 players, you'll have covered enough of that volume. The market is so easy to manipulate". - says Wimmer.

The term "whale" is a definition for holders of huge positions in cryptocurrency. However, Wimmer does not agree with the widespread rumors that large institutional players are entering the market by driving the prices upwards. He points out that, in fact, they continue to lose interest because of the increasing number of criminal activity and hack attacks.

Each of these catalysts may be the cause of the current movements. Whatever the reason, however, it's good to keep in mind how volatile can be Bitcoin in both directions.


 Jr Trader Martin Nikolov

Read more:

RECCOMEND WAS THIS POST USEFUL FOR YOU?
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance

London


25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256

Universal numbers

World Financial Markets - 0700 17 600    Varchev Exchange - 0700 115 44

Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.

Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006

The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.


Disclaimer:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

chat with dealer
chat with dealer
Cookies policy