The global cryptocurrency market sprang back to life with the price of bitcoin surging to above $7K high. Wise crypto investors who invested in the cryptocurrency when the price dropped to below 3K are not celebrating huge profits. To people who have been observing the trends and charts, this should not come as a surprise. The leading cryptocurrency market value jumped from $1000 to $5080 in less than one hour early this month, April 2019.
Why Bitcoin Price Increased Suddenly
The current bull run was predicted three months ago by experts and we hope that you took the initiative to invest in the cryptocurrency when the price was low. After a bear run that lasted for close to an year, it is understandable to see the low number of people who took advantage of the trend. However, experts were patiently waiting for the trend to change and the current surge in price is a clear indication that their prediction was right.
Looking back, the surge in bitcoin price was long overdue. Understanding what caused this surge will help you capitalize on the next bull run and also make informed investment decisions.
Here are the three reasons why Bitcoin price suddenly surged to above $7K.
1: Technical Aspects Fore Shadowing Bull Run
As mentioned earlier in this article, based on the trend on bitcoin charts, it was clear that a bull run was eminent. Towards the end of February, many online sites reported that the 50-week bitcoin moving average dropped to below the moving average at that time, 100-week. This trend confirmed a bearish cross over – the first one to be ever experienced since April 2015.
In most cases, by the time the cross over is confirmed, the bear market is usually exhausted. A number of longer duration indicators such as money flow index and moving average convergence divergence added evidence to the trend. Notably, the MFI bottom on March 4th thereby contradicting the low price of bitcoin at the time.
It is also important to note that bullish divergence in the crypto trading market is considered an early warning of a bearish-to-bullish trend reversal. In addition, a MFI surge is a sign of an increase in buying pressure while a drop in MFI is considered an indication of increase in selling pressures.
2: Market Activity
In the volatile cryptocurrency trading world, sudden changes in the market have a major impact in prices of digital assets. We cannot rule out the impact that market irregularities might have on the price of bitcoin. Early this month, it was reported that one algorithmically successfully ordered bitcoin worth $100 million.
3: Mining Reward Halving
Technical developments supported the expectations of a stronger rally before the incoming halving, programmatic reduction of bitcoin paid to miners for their work. There are reports that bitcoin mining reward will be reduced by half in May 2020. A look at historical data shows that this process often places a bid under the cryptocurrency for at least one year before implementation.
That is, the pre-set protocol automatically lowers new issuance after a given number of blocks are processed. The last time, this occurred was in 2016.
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