Bitcoin is surging, and here's why...
Bitcoin went up by almost $1,000 dollars in less than an hour yesterday, going from roughly $4,000 all the way up near $5,000.
(Source: https://finance.yahoo.com/news/algo-hedge-funds-join-cast-113107948.html)
And it has even more follow through today...
As I type, prices are sitting right around $5,200.
Awesome!
But what is going on?
Like most cases where bitcoin pops or drops, there wasn't a readily identifiable cause.
Though, I can tell you that it was certainly not caused by some folks misinterpreting some April Fool's Day jokes about the SEC approving a bitcoin ETF and that caused prices to spike, like some in the media would have you believe.
No, the most likely cause was a little simpler...
The most likely cause was this:
Prices were sitting right near a crucial point on the charts.
The $4,200-$4,300 coincided with the 15 month-long downtrend line that prices were yet to break even once in 15 months.
Also there was significant horizontal resistance at that level.
What happened was a large buy order came in (or just enough buying pressure to trigger the large buy order to go off), of roughly $100 million (20,000 bitcoin) and that buy order firmly pushed prices past those major resistance levels.
Once that happened the automated trading programs took over.
Buy signals flashed for the computers and they hit the buy button, fiercely.
Since most of the sellers were out of the market at this point, there wasn't much selling pressure to counteract the algo bot buying.
The result?
A $1,000 dollar surge that so far doesn't have an end in sight.
Isn't crypto fun? :)
Something like 17 crypto algo funds were created in just the last 7 months, with many more created stealthily over the past few years.
These are the guys that are likely moving the markets on a daily basis.
Some more of the specifics surrounding what likely pushed up prices can be found here:
https://finance.yahoo.com/news/algo-hedge-funds-join-cast-113107948.html
Stay informed my friends.
-Doc