Bitcoin On Hold Above $5k With Huge Trading Volumes
Cryptocurrency Bitcoin has continued to hold its position at $5,000, or just shy of £4,000, for the 10th consecutive day, following reports that trading in BTC, and in other major alt coins including Ethereum (ETH), reached similar levels to those seen during the historic bull run in 2017.
Supporters of the maligned cryptocurrency market have said that the recent rally indicates that the market bottom is now in, but critics, who continue to paint the market as a bubble, have said that there is a strong possibility that at least some of the volume could be down to what is called wash trading.
The Recent Rally
Bitcoin prices rallied more than $1,000 in less than an hour at the beginning of April. To most investors, a 20% movement in such a short space of time is unheard of. In fact, the vast majority of traders shy away from markets with such exaggerated movements for fear that an inverse movement could be right around the corner.
However, this kind of move has become almost commonplace in cryptocurrency.
During 2017, when Bitcoin saw arguably the biggest bull run in trading history, some alt coins made gains of several hundred per cent in a single day. However, before BTC had the chance to reach $20,000, it plummeted to $3,500, shedding billions from the market.
Many new traders lost out, and those that remained in the market have been waiting for the market bottom. In fact, several have repeatedly called it, only to be thwarted by further movements down.
In most cases, though, the thing that was lacking from any positive movements was that of trading volume. Volume has been increasing in recent weeks, and the market saw the kind of levels that have not been witnessed since the halcyon days of 2017.
Not everybody is convinced by these movements. Forbes, for one, has pointed to the possibility of wash trading, where an exchange essentially acts as buyer and seller in a large transaction.
This gives the appearance of liquidity in the market, without any of the currency actually changing hands. Volume goes up but prices remain stable. For now, the market watches with interest to see whether Bitcoin can continue its journey back towards $6,000 and beyond.