Ad
News
Bitcoin just hit $7,000: 3 factors that could be behind this explosive move Bitcoin just hit $7,000: 3 factors that could be behind this explosive move
🚨 This article is 5 years old...

Bitcoin just hit $7,000: 3 factors that could be behind this explosive move

with insights from Skew [acquired by Coinbase]
Bitcoin just hit $7,000: 3 factors that could be behind this explosive move

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

Join Japan's Web3 Evolution Today

Bitcoin has shaken off a worsening coronavirus outbreak and record jobless claims in the U.S., rallying past $7,000 just minutes ago as of the time of writing this article, reaching a local high of $7,200.

With the recent surge higher, BTC is up 24 percent from the weekend lows of $5,800.

bitcoin price

Although many have embraced this move, many traders were caught off guard by Bitcoin’s recent strength, epitomized by the $40 million worth of BitMEX short positions that have been liquidated in the past hour, data from Skew.com shows.

There are some leading theories as to what is causing this move, though.

Demand for Bitcoin is booming

The most obvious theory seems to be that there is a rapidly-growing demand for Bitcoin and other cryptocurrencies.

Qiao Wang of Messari, a former institutional trader, summed it up nicely when he shared the below image amid the move, which shows the Bitcoin order book for Coinbase Pro.

Although not representative of other exchanges, it is clear that there are more traders bidding Bitcoin than selling it, with there existing nearly 24,000 BTC worth of orders down to an order price of $2,000 and a mere 4,000 BTC worth of orders up to $12,000. Wang wrote that “it can’t get any more long-term bullish than this,” referencing the data.

Alongside this, as CryptoSlate has detailed over the past few weeks, stablecoin issuers, such as Tether, Binance, Paxos, and Circle/Coinbase, have created hundreds of millions of new coins within the past month.

What’s really going on with Tether’s exploding supply? Crypto exec tells all
Related: What’s really going on with Tether’s exploding supply? Crypto exec tells all

Bitcoin’s Q2 and April seasonality

Another thing that could be pushing the crypto market higher is Bitcoin’s tacit seasonality, which sees it underperform in the first quarter of every year to only start rallying in April.

Case in point: trader RJ recently shared the below chart, which shows that for the past two years, Bitcoin has always rallied extremely strongly during the month of April, gaining 33.6 percent and 28.6 percent in 2018 and 2019, respectively.

btc price

Hype for the halving continues to grow

Finally, it is clear that the hype for the upcoming Bitcoin block reward reduction, known as the halving, continues to grow as it is now under 50 days out, made clear by the growing Google search volume for the term and the social media buzz about the event.

As found by cryptocurrency analyst Nunya Bizniz, Bitcoin rallied strongly into the prior two halvings (marked by the red vertical lines in the chart below). History rhyming will see the cryptocurrency continue to push towards the upside as the halving draws ever closer.

Bitcoin Market Data

At the time of press 9:27 am UTC on Apr. 25, 2020, Bitcoin is ranked #1 by market cap and the price is up 13.56% over the past 24 hours. Bitcoin has a market capitalization of $129.31 billion with a 24-hour trading volume of $48.44 billion. Learn more about Bitcoin ›

Bitcoin

9:27 am UTC on Apr. 25, 2020

$7,065.83

13.56%
Crypto Market Summary

At the time of press 9:27 am UTC on Apr. 25, 2020, the total crypto market is valued at at $196.79 billion with a 24-hour volume of $151.53 billion. Bitcoin dominance is currently at 65.77%. Learn more about the crypto market ›