Recently, bitcoin incurred a near-$1,000 surge in its price. While this might traditionally cause people to get excited, some industry experts are suspicious of the circumstances surrounding the sudden (and short-lived) jump.
Bitcoin Is Acting Strange, Lately
At press time, bitcoin has settled down and dropped to $7,300. However, on December 4, the currency allegedly spiked all the way to $7,800, though this was only temporary. Among the few industry analysts to take issue with the surge was Mati Greenspan, a senior analyst with the exchange e-Toro. The crypto mogul took to social media to express the following:
As I write this morning, today’s price spike does seem a bit suspicious… The sudden movement on an otherwise uneventful day, the low volumes across exchanges, the quick retracement after the move, it all points to the assumption that this was the outcome of a single player with a large buy order. Or in other words… a large whale.
Whenever a whale rises from the depths to take some sort of action with crypto, the entire industry seems to get affected. We’ve seen it happen time and time again. Whales – or individuals that store heavy amounts of bitcoin or other crypto in single accounts – will sometimes move certain funds over to separate wallets.
This wouldn’t be so bad except they often move large amounts given that they’re “crypto rich,” so this undoubtedly affects the price behavior of the market given that it’s not used to such a heavy figure being transferred.
Whenever a whale is active in the crypto space, the prices of many forms of crypto – usually BTC – tend to take a nasty fall.
Tim Enneking – the managing director of Digital Capital Management – also thinks that the recent price spike is suspicious, claiming:
With this unusually low volume crypto markets have experienced, any single, large transaction has an [outsize] impact. Th is true both because the transaction itself will affect markets and because, in the absence of other signals, market watchers overreact to such a transaction and exaggerate the move, regardless of direction.
Most evidence suggests that bitcoin has been heavily oversold during the past several weeks, though to be fair, the currency has managed to retain a specific momentum despite these conditions. The currency initially fell into the $7,000 range during late November for reasons that are still not quite understood.
Will BTC Stay Where It Is?
It later peaked during the Thanksgiving holiday – which is when the near-$1,000 spike initially occurred – only to fall back down to the $7,500 mark, which was later followed by $7,300. At this stage, it looks as if this is where BTC is planning to end the year.
Still, the fact that bitcoin has managed to stay within this range and not fall any further suggests that it has developed greater maturity when compared with December of 2018.