Just days ago, the original crypto was looking decidedly fragile going into the weekend with plenty of naysayers predicting a drop through the trapdoor of $3,250 and into the waiting abyss where figures of below $2,000 were being suggested. However, like a relentless gladiator with an overpowering will to live, Bitcoin catapulted with an out-of-the-blue spike yesterday lunchtime which is still without reasonable explanation. Curiously, Bitcoin’s surprise green candle (a trading indicator of strong upward gains) triggered positive movement across the board as all major cryptocurrencies enjoyed a sustained period of investment. Much of the dramatic movement is being put down to heavy trading in Japan where huge individual investments in Bitcoin were recorded.
Quite why, however, is still anyone’s guess.
After all, Bitcoin’s value remains on very thin ice despite yesterday’s leap and this morning’s value nudging $3,500.
As we have seen over the last three weeks of volatility, the volume simply is not in the market to give this upward movement enough foundation to build upon.
If that trading volume was there, then many more experts would be getting excited at the prospect of a sustained correction that could put Bitcoin back up to $6,500 – where it was for most of 2018.
But again, that daily volume is not in place as we make the final turn into the home straight for Christmas.
When the price of Bitcoin and other major cryptocurrencies like Ethereum, Ripple and Bitcoin Cash can rise in this fashion without robust trading volume it ought to set alarm bells ringing.
Why? Because it cannot possibly be sustained.
Compared to the end of November, the price is high. In fact, it is up almost nine per cent.
But when you compare today’s price against the rest of the year, is it a drop in the ocean.
It is also 80 percent down on this time last year.
This undulating madness which has dominated trading throughout December is not creating any trust whatsoever.
Downward movement is only feeding those traders who enjoy making a few dollars by shorting the market, and any upward movement is not enough to offer much more than a glimmer of hope for the long-term investors.
Amid all this uncertainty, however, there is one thing that is absolutely certain – this will go one of two ways.
Firstly, we have seen $3,500 temporarily broken already this morning.
If anything above $3,490 can be maintained beyond lunchtime then it could be a foothold up to the next mark.
That would mean it is quite possible we may see the next level of $3,630 breached.
However, if it looks like it may be slipping away from that $3,490 line by the end of today, then we will likely see a repeat of last week’s bounce along the $3,000 mark into the Christmas holidays.
Either way, there’s an interesting 24 hours ahead of us.
One other point to consider is the notion that history could repeat itself.
Plenty of experts were keen to draw comparisons between yesterday’s sudden spike and that of the same time last year when Bitcoin was reaching for the oxygen masks as it touched an astonishing $20,000.
A common theme last year ahead of that remarkable high was a bull flag (where the pattern on the market graph in an upward trend resembles a flag).
We have had the potential makings of such a pattern over the last 24 hours, but it is certainly nothing like 2017.
Let us not get carried away. Remember, you can get three people staring at a cloud in the sky and each will view it differently.
One will see a five-legged giraffe, one might see a dancing monkey, and the other will be looking at a sign from the crypto gods telling them to lump their savings into Bitcoin because of what it did a year ago.
To put things into perspective, investors were popping champagne corks this time last year after a rise of $3,000 in one day.
This morning, some people are hopping up and down at the prospect of a $300 lift.
Stay calm. Hold your nerve, and remember this is a very different market to the one that made so many people wealthy last year.
Coin Rivet is a website bringing news, information, analysis, opinion and insight from the fast-moving blockchain world.