The reasons behind the crypto rally remain unclear



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

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