According to Oliver von Landsberg-Sadie, Founder and CEO of the London-based financial services company BCB group, several large buy orders totaling more than 20,000 BTC ($100 million), or 0.1 percent of the total supply, likely catalyzed the explosive growth currently being witnessed in the crypto markets.
The theory currently bouncing around is that the huge surge witnessed this week is attributed to massive investments from either a single or several large investors. Smaller investors are understandably worried that a correction may be on the way, with Bitcoin (BTC) potentially falling back to its new support around $4,200.
However, as it stands, this doesn’t appear likely, with Bitcoin comfortably trading around $5,000, while a new support level has formed at the 200-day moving average around $4,600.
In addition, it appears these whales may be content with their gains and are now moving their funds off-exchange — likely in anticipation of further growth in the near future since the $4,200 resistance has been convincingly shattered. One such whale moved a total of 600 BTC, currently worth in excess of $3 million from Huobi to an external wallet.
— Whale Alert (@whale_alert) April 3, 2019
Typically, large transfers from a private wallet to an exchange wallet are seen as a bearish indicator, since many believe that such large transfers often precede sharp crashes. If that is indeed the case, then moving such large values away from exchanges could be seen as a vote of confidence from large and institutional investors, potentially signaling further growth ahead.
Note that this is just one of what could be many large-scale transfers off exchanges. It is unknown whether these are the same investors that initially spiked the market.
Now, many are beginning to believe that this is just the start of another large bull run, potentially exceeding that seen in 2017 — a year in which Bitcoin grew almost 2,000 percent to reach its all-time high of over $20,000.
In about 415 days from now, on approximately May 24, 2020, the number of newly minted bitcoins generated through the mining process will be cut in half as the block reward is slashed to just 6.25 BTC per block. Prior to previous halving events, Bitcoin has experienced significant rallies, exploding in value in the lead-up to and after the halving.
Should the trend repeat itself once more, it is not unfeasible to see Bitcoin reach a value well in excess of $50,000 within the next one to two years. However, as always, past performance isn’t always an indicator of things to come, and this is doubly so for assets as volatile as cryptocurrencies.
As it stands, the next major resistance sits around $6,000 — a barrier which will be a tall task to break. However, if $6,000 does go down, this will be a strong indicator that the market is well on its way to recovery.
What is your opinion on the current market situation? Will Bitcoin continue to soar past $6,000, or will it stabilize at the new support range? Let us know your thoughts in the comments below!