Bitcoin Price Swings After Hitting a New All-Time High of $18,353 | Coinspeaker

Bitcoin Price Swings After Hitting a New All-Time High of $18,353

| Updated
by Bhushan Akolkar · 4 min read
Bitcoin Price Swings After Hitting a New All-Time High of $18,353
Photo: tiendientu vietnam / Flickr

Post a wild rally of $4k in a matter of just 48-hours, Bitcoin enters the correction zone.

Bitcoin has been on a crazy upward momentum in the past 48 hours with the price of the cryptocurrency surging by $5.5k during this time. There has been a huge rush of retail and institutional investors for buying Bitcoins and as a result, the 24-hour volumes have crossed a whopping $18b billion. Bitcoin’s market cap now is over $250 billion with the overall cryptocurrency market cap crossing $400 billion.

One of the major reason for this recent rally is said to be that people are just buying due to their irrational mentality of the fear of losing out. Thus, as per analysts, this has resulted in a speculative bubble being formed and many are anticipating a big crash in the coming time. Also, another major driving factor for the Bitcoin rally since November is the participation in Bitcoin by several hedge funds and other big institutional investors.

During the latest rally from sub $13k to up and above $18k, there has been a huge inrush of new investors registering to the exchanges. As per data, Coinbase is currently witnessing up to 100,000 new registrations on a daily basis as the overall userbase of the exchange crosses 13.3 million.  Moreover, a huge number of Bitcoin buying orders during this period also caused an overload on the exchanges.

Owing to the pressure of huge orders from retail investors, Coinbase had to go offline for few hours on December 7 as the engineers struggled to scale the website while meeting the demand. The exchange witnessed a five-fold increase in its volumes to $29 billion and nearly 200,000 transactions were queued up for more than 24 hours despite paying high fees.

Another interesting thing observed was that the price of Bitcoin varied by a difference of $2k across major exchanges like GDAX and Bitfinex. However, during the same time, Bitcoin was trading at an even larger premium on South Korea’s Bithumb exchange with the price higher by $3k.

The Bitcoin futures contracts, which are just around the corner and starting this Sunday will have a greater influence over the trading patterns observed in the coming weeks. Moreover, these contracts are said to be cash-settled which doesn’t require the trader to hold the cryptocurrency. As a result, a lot of liquidity can be expected further in the Bitcoin market, and we could possibly see a considerable jump in the daily trading volumes as well.

However, after going through a recent rally and hitting its new all-time high of $18353.40 as per the Bitcoin charts on CoinMarketCap, some wild swings are observed in the price of Bitcoin as the cryptocurrency is again gripped with a huge volatility. In just a matter of past 12 hours from the press time, Bitcoin has fallen more than 15% before recovering back from a low of $15423.90. At the press time, the cryptocurrency is trading at $17,065.90, 10% up from its 24-hour low.

As Bitcoin continues to surge further, may financial heavyweights are constantly raising alarming signs and suggesting that there is a speculative bubble at the moment which can burst anytime. Commenting on this matter, Neil Wilson, ETX Capital analyst, said:

“It’s a bubble for sure in its dynamic, we just don’t know when or how it will collapse.”

Also, the growing popularity of Bitcoin has also grabbed the attention from several regulatory bodies and tax agencies from around the world. Analysts believe that the involvement into cryptocurrencies of such bodies can further grow if the craziness surrounding Bitcoin continues to grow as well. Wilson said:

 “You’re not going to regulate cryptos out of existence, nor would governments and central banks wish to stop blockchain technology. But they can regulate cryptos to a point where they destroy the value in any one version by taking control of it for themselves. If you say that cryptos are currency, then mining is akin to printing money, which is only a game for central banks and governments.”

Bitcoin News, Cryptocurrency News, News
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