Bitcoin has been an absolute rocket ship the last 24 hours
After hitting $7,400 early Friday morning, prices ran all the way to $8,500.
A pop of over $1,000 in less than an hour.
But guess what, bitcoin wasn't done.
Later in the day, bitcoin made a push all the way to $10,500.
Yes you read that right, bitcoin was briefly up over 40% in less than a 24 hour period.
Currently prices have settled back around $9,100.
(Source: https://www.coindesk.com/price/bitcoin)
What caused the spike?
Initially it was reported that the spike in prices seemed to be happening right around the same time a news report came out of China talking about how China was now more open to blockchain technology.
Which, ironically isn't really news to anyone.
They have always been open to blockchain, just not bitcoin and the current altcoins.
Here was a snipit of the release on twitter:
Well, many in the market were quick to take those remarks as evidence that China was going to soften their stance on bitcoin and crypto.
While that may or may not end up being true, the likely driver for the parabolic rise was something else...
Short covering.
Short covering was the real driver of the big move
Bitcoin sentiment was at extremely low levels.
The $8k support and just been broken and the $7,500 support area wasn't looking like it was going to hold either.
Congress had just finished grilling Zuckerberg and bitcoin/crypto seemed to be firmly in the cross hairs of regulators.
Add all this up and it made for a good time to short bitcoin, or so people thought.
All it took was a little buying to come from the China news and shorts got squeezed.
As the first couple got squeezed and were forced to buy back, it fueled prices higher squeezing even more shorts. A chain reaction that helped launch bitcoin into the stratosphere:
Most of this likely took place on Bitmex where they allow traders to use up to 100x leverage.
Why anyone would want to use that kind of leverage is beyond me, but when you have the sentiment like it was and a load of leverage on the short side, it doesn't take much to get prices to sling shot in the other direction.
And that is likely exactly what happened.
Now the question becomes... how much of this move will ultimately end up holding?
Stay informed my friends.
-Doc
Thanks for the detailed explanation. Best one I've seen.
Thanks. Are you guys still going forward with the crypto lawsuit?
Another thing was the banker that’s supplied tether was arrested... also tether printing tons of more fiat tether lol... people got scared and went into bitcoin 🤣
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I hadn't seen that, do you have a link?
Flew under the radar... the money flow to bitcoin, ETH, EOS etc etc all came from tether with hardly any new money coming in. https://www.google.com/amp/s/thenextweb.com/hardfork/2019/10/25/cryptocurrency-payment-processor-crypto-capital-boss-nabbed-after-allegedly-laundering-390m/amp/
That doesn't sound surprising to me. Money in Asia tends to sit in tether (or move to Asia via tether) and then jump in btc when the time is right.
Yeah, I’m waiting for new money coming in, I’m thinking we can see tons of it coming in December to April 😀
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If bitcoin continues to do well into the Holidays perhaps we will see retail return to the party again as well.
Thanks for sharing all the info @jrcornel :)
It's good to see the crypto markets in the green again; after being so long in the red, with fears of bottoming out even lower.
I do think that China is a huge catalyst for the recent move. With such a big economic power endorsing Blockchain, there's potential for other countries to follow suit.
Here's hoping India's next.
Yep, and hopefully endorsing blockchain turns into endorsing bitcoin. It's not clear that is the path things will go at this point.
I second that. Considering all the flak that Libra is getting and how antsy some regulators are, there are some uncertainties moving forward.
I actually just posted an article on China a couple of hours ago.
I'm interested on what you think about it.
Nicely done!
Thanks! And cheers for the upvote as well.
Glad you like it :)
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Congratulations @jrcornel!
Your post was mentioned in the Steem Hit Parade in the following category:
Xi Jinping is the man of the month.
I am surprised bitcoin is jumping so much on his statements as he didn't mention bitcoin once as far as I saw?
my friends<> bitcoin Crypto ....post
Thank you!! @sahmed123
Upvot&Follow ME!
Cool.
These leverage trading platforms add a whole new element into the game. Overtime we would expect things to get less volatile but with those platforms it seems to not be the case.
And then with Bakkt allowing institutions to bet on the short side against bitcoin with physically deliverable products, it could exacerbate the short squeezes.
Appreciate the news sir - just hoping steem starts trending up again at some point lol. Would love to hear your thoughts in this
Yea that would be nice wouldn't it. There are probably several factors at play for why steem is having so much trouble. The high inflation and lack of demand are the main culprits, but why the lack of demand compared to other projects? Steem doesn't have the best reputation due to the ninja-mine, the initial 100% inflation, whale issues, a platform that doesn't really do what some people think it was supposed to do, constant selling to keep the lights on by the lead development team in Steemit.Inc, a lack of marketing or advertising (though with retention rates so low that doesn't make much sense to spend money there), and there are probably some I am missing...
In my opinion we probably need to drop the reward pool all together, cut the inflation to the DAO as well as witnesses and make the inflation extremely small overall, like 1% per year. Let smts and games be the value drivers for steem.
That is one idea.
The second would be that if you keep a steem reward pool, I would try to actually back it with something, like ad revenue. That would at least give it some fundamental value as well as utility.
Not sure exactly the specifics of how that would be done, but the point is that things likely can't continue like they are for steem to exist long term. We need revenue coming in instead of just going out.
exactly, generate some revenue that way it adds value inherently!!!
Yep. I would have thought we would have done that by now, but hopefully things can start moving at a faster pace now, they already seem to be.
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