The 42% surge last weekend brought some welcome energy to the crypto market. Various theories have been attributed to the latest rally, ranging from President Xi Jinping’s speech endorsing blockchain technology to the apprehension of Crypto Capital’s CEO, Ivan Manuel Molina Lee who was accused of bamboozling Bitfinex and purportedly forcing it to withdraw $850 million from its sister company Tether. However, long-term bitcoin critic Peter Schiff believes that whale traders were responsible for manipulating the prices.
Nonetheless, bitcoin seems to have stabilized above $9,000 on Tuesday (29/10/2019) after the intense rally. Bitcoin Cash is the largest gainer today at 7 percent, likely due to the return of Jihan Wu as the legal representative and executive director of Bitmain in China. Former co-founder Micree Ketuan Zhan has been ousted and Bitmain employees asked not to take any orders from him. Following this recent bullish action, bitcoin bull Tom Lee said that the bull market has resumed.
Thank The Whales?
Bitcoin rallied from $7,300 to even touch the $10,000 level within a span of hours last weekend. But unlike the general consensus, Peter Schiff says this rally that jolted bitcoin prices were all whales manipulating the market and had nothing to do with the speech made by Xi Jinping or the forthcoming cryptography law.
Schiff had this to say:
“Bitcoin’s recent sharp rally unlikely had nothing to do with China, or any fundamental factor. It clearly looks like market manipulation by whales looking to sucker in momentum buyers. By pumping up a technically weak market, they are able to dump more #Bitcoin at higher prices.”
As expected, Schiff’s tweet was followed by a myriad of comments from bitcoin enthusiasts. Cryptonite questioned Schiff’s theory citing that on the day of the bitcoin rally, searches for bitcoin and blockchain on WeChat reached over 10 million. Also, the co-creator of the Unity protocol Joshua D Tobkin added:
“I actually think it’s not that they are dumping at higher prices. Actually imho whales are manipulating, dumping and then snatching it up again. I believe it is an accumulation technique actually, not the other way round.”
Bullish Signals Are Piling Up; Bitcoin Bull Market Is On
After plunging for months, bitcoin experienced an unexpected rally that brought out the bulls in full swing. Wall Street strategist and co-founder of Fundstrat Global Advisors Tom Lee opined that this latest pump confirms the return of the bull market. According to Lee, there have been a lot of bullish signals in the last few days like the S&P 500 reaching a new all-time high, China’s crypto-friendly policy, October 25 bitcoin price spike and the rebound of the bitcoin misery index (BMI).
BMI is a technical indicator that is based on the profitability of average trades. It measures how ‘miserable’ investors are and according to Lee, this indicator bottomed at 36 on October 24 and it has since rebounded.
Previously, Lee has brought forward the unpopular opinion that there is a correlation between the S&P and bitcoin where these two move in tandem. Per Lee, bitcoin surges when the S&P 500 is up.
The combination of all these factors provides Lee with a strong hint that we may be entering a new bull market.
Bitcoin’s Trajectory Going Forward
At the current bitcoin price, fears of a drop still linger and some experts calling for a drop. BTC is presently trading at $9,369.36 and is not displaying any signs of what is referred by bitcoin fans as the “Halloween Pump”. In 2015, bitcoin rallied weeks to Halloween before finally breaking past $300.
Be that as it may, China might be fully embracing blockchain technology and bitcoin finally and this is certainly a good sign. In addition, bitcoin is to undergo halving in May next year and historically, bitcoin has always spiked after each halving.