After a relatively lackluster start to 2019, Bitcoin’s (BTC) price action has once again grabbed the attention of the masses with a 20 percent jump, crossing the $5,100 mark.
The surge on Tuesday carried BTC to its highest level since November 2018, ending three months of low volatility in the market.
After dropping to 2018 lows in December, Bitcoin has struggled to regain traction and its price has bounced off the $4,200 resistance level several times. As the cryptocurrency’s price had stabilized after a downturn during the year’s end, it entered a period of consolidation with low price swings.
Crypto’s Wild Swings
The cryptocurrency market’s susceptibility to wild price swings has made it popular for investors, who have been patiently waiting for a return to the high price swings of 2017. A low-volatility environment isn’t so attractive for traders in capital markets.
With the selling pressure seeming to ease off, traders have finally gotten their wishes granted with Bitcoin’s price and volatility suddenly experiencing a sharp increase.
While it’s tough to discern what exactly ignited the sudden move, the consequences can be easily recounted. Market participants will be cheering for their gains, while on the other hand, others will be reeling from losses.
According to data on Bitmex, traders that had entered short positions have been liquidated in masses. The total amount of shorts liquidated totals to nearly $500 million.
— Edward Morra (@edwardmorra_btc) April 2, 2019
Naturally, with higher volatility comes a higher risk of being liquidated for traders that enter leveraged positions.
Further Upsides for Bitcoin?
At the time of writing, Bitcoin’s price has retraced to the $4700-4800 levels, still registering an impressive 15 percent price increase on the day. Even with such a high price swing, data indicates that traders are reluctant to start selling or enter new short positions.
Market expectations might continue to steer the ship upwards, with some experts calling for $5,500 as the next key level in Bitcoin’s price action. Moreover, the FOMO (fear of missing out) phenomenon might kick in for investors sitting on the sidelines and new buying volume could push the price even higher.
Whichever way Bitcoin decides to go from here, April looks to be the perfect time for cryptocurrency traders, as volatility has spiked and is expected to remain higher than in the first quarter of 2019.
Volatility is back … PARTY TIME! pic.twitter.com/M6w3ovKyUT
— Arthur Hayes (@CryptoHayes) April 2, 2019
What’s your take on Bitcoin’s recent price surge? Is this the bullish sign that the market has been waiting for? Share your thoughts in the comments below!
Images courtesy of Twitter.