Bitcoin seems to be leading the global cryptocurrency market into a fresh wave of bullishness following the release of the lacklustre US jobs report last Friday (September 3). Bitcoin, the world's largest and most popular cryptocurrency, scaled $50,940 (roughly Rs. 37.23 lakhs) on the day. On Monday (September 6) afternoon, the price of the cryptocurrency touched $51,809.55 (roughly Rs 37.87 lakh). This is the highest climb for the crypto token since May when it had started declining after reaching a record high of $65,000 (roughly Rs 47.51 lakh).
Bitcoin scaling $51,000-mark
At 12:40 PM ET, the price of bitcoin stood at $50,941.13 (roughly Rs. 37.21 lakhs), according to Coinbase. The growth seems to have been triggered by the release of the US jobs data that was positive in terms of showing a rebound in the number of new jobs. The cryptocurrency, however, remained range bound in the range between $47,000 (roughly Rs. 32.88 lakhs) and $52,000 (roughly Rs. 38.34 lakhs). The spike in bitcoin price has made the previous high in the cryptocurrency almost insignificant. This is not the first time the price has shot up after the release of positive US economic data. In the last few weeks, bitcoin has significantly outperformed the global market after the US unemployment rate hit its lowest level in almost two decades.
Bitcoin performance after rout in May
Bitcoin price had plunged by around 30 percent after the cryptocurrency's previous record high was set in May. Now, things appear to be looking up as the cryptocurrency appears to be showing strong signs of revival, at least from a technical standpoint. For instance, chartists Naeem Aslam, Mohammad Islam, and Thomas Glucksmann, writing for Bloomberg, have observed that the technical indicators have given "relief" to bulls. They wrote, "It seems that BTC is turning the corner with the 12-hour trendline of the $60,000 support now in play." "[The 12-hour] RSI and MACD line are also in a bullish alignment now and having closed above the 50-period SMA (this could be a hint for an imminent breakout), while the weekly chart remains in bullish shape," the analysts added.
Bitcoin futures volumes up
Following the sudden spike, some traders speculate that the rise could be due to a short squeeze, according to market experts at the CME Group, which is the world's largest exchange. For those who may not know, a short squeeze is a technical term used to describe when demand for a particular asset increases and the price rises, thus causing sellers to rush to cover their positions, thus pushing prices up. This sets the price back down again and sometimes the investors who did not sell off and lost money find themselves able to buy the asset at lower prices. A negative for traders but a good for crypto investors who, due to the short supply, end up getting decent returns.
Bitcoin ETFs not yet authorised
As per the latest data from CoinDesk's Bitcoin Price Index (BPI), the total market cap of all cryptocurrencies reached a record high of $213 billion as of Friday (September 3) and continues to strengthen at present. "The speculative fervour with which the crypto space has been frothing over the past few months has dissipated somewhat in recent days," wrote John Spallanzani, senior economist at GFI. "Volumes and daily trading activity are down compared to the end of June." In his report, Spallanzani added that bitcoin's high volatility "may represent an increased effort to restrain risk taking", as well as a market correction after the sustained surge in price. As of August 31, a total of $6.
Conclusion
If Bitcoin is rising back to all-time highs in a matter of days, this shows that the cryptocurrency market could be entering an expansion phase after a major sell-off in May and June. The growth of Bitcoin's price in the past few weeks has been primarily driven by speculation regarding the emergence of the futures market for the cryptocurrency. This week, the Chicago Board Options Exchange (CBOE) has announced that it will soon list Bitcoin futures, which is expected to intensify the speculative activities for the cryptocurrency. The Bitcoin Investment Trust (GBTC) has risen by 7.8% from Friday's price of $835.54 (roughly Rs. 574,000) to $939.29 (roughly Rs. 657,000) in the past 24 hours.
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