4 reasons why Bitcoin is pumping

12 May, 2019
by Will Heasman
Analysis
4 reasons why Bitcoin is pumping

Since that first prominent $1000 candle that catalyzed a move above $5000 back in April, the market has gone strength to strength gaining upwards of 75% and adding $3000 in little over a month. So what has propelled Bitcoin and the wider cryptocurrency markets? Here are 4 reasons for the pump…

Institutional interest

After months of speculation, multiple delays and a prolonged testing period, Fidelity will finally start buying and selling Bitcoin (BTC) on behalf of institutional investors, within the next few weeks

The influx of institutional investment has been noted as a key factor of the furthering of the cryptocurrency market, and it seems to have come at exactly the right time.

According to Fidelity spokeswoman, Arlene Roberts, the firm already has several clients on-boarded, focusing on custody of Bitcoin primarily.

Understandably this is one of the biggest catalysts for the markets recent pump, and let's be honest it was seen a mile off. Still, with this fundamental development propping up the market it's likely we’ll see gains continuing to flood in.

Of course, fidelity isn’t the only promise of institutional investment, Bakkt -  the crypto venture of the Intercontinental exchange - is said to be launching later this year, and looks certain to secure the capital of scores of institutional investors.

Technical analysis lining up

Constant comparisons to the 2015 market seem to have played out almost candlestick to candlestick, with many suggesting a large correlation with the current market, and the market that led to Bitcoins parabolic rise at the end of 2017.

One such parallel was pointed out by stock trader turned cryptoanalyst, Peter Brandt, who noted that BTC was on the precipice of parabola back in April after pointing to similarities in the 2015 market:

Another bullish piece of technical analysis came to fruition back at the end of April, with the formation of a golden cross - a bullish indicator in which Bitcoin 50-day moving average (MA) crossed above its 200-day MA. This marked the first time since October 2015 that this bullish indicator had formed, a catalyst which propelled the market to the hights of the 2017 bull run. 

 The annual Consensus pump

Historically, the Consensus conference has coincided with a market pump. With so many crypto-minded individuals and major companies partaking in one of the biggest gatherings in the crypto industry, coupled with the current bullish sentiment, its perhaps understandable that the markets might feel an impact.

Past gatherings have proven positive for the crypto markets - with the notable exception of last year which really had no effect on the market whatsoever – however, it appears that this year is shaping up to be very different.

Bouncing back from bad news:

In the past few weeks, the industry has taken two notable hits of bad news; the first of which was the Bitfinex-Tether fiasco involving a formal investigation from the New York Attorney General’s office after Bitfinex dipped into is USDT stabilizing cash reserves. Shortly after, it was revealed that Tether was not 100% backed as it has professed to be.

In reaction to this, the market contrarily rose, increasing by 2.2% on the day the news broke.

The second piece of bad news broke just a few days ago when it was revealed that Binance had incurred a fairly serious security breach. 7000 BTC was stolen. While the market dipped somewhat, Bitcoin managed to hold above the key level of $5700 once again proving it's resilience. 

So there we have it just a few reasons as to why the market is currently pumping. However, beyond all else, the current bullish sentiment appears to be one of the biggest factors for this continued rally; many believe we have officially thawed out the remainder of crypto winter, and as with past bull runs the sky could well be the limit. 

What do you think is the biggest catalyst for this recent pump? let us know in the comments! 

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