Gold Slightly Higher but Bitcoin Is Getting All the Attention Today
The gold and crypto markets are moving higher today as stocks take a step back following two recent days of strong gains. The gold market is fairly quiet today, however, Bitcoin and other cryptos are getting some significant attention.
Renewed Enthusiasm in Crypto
The crypto markets have been fairly quiet in recent months as investors seemingly found little new information to get excited about. Leading crypto currency Bitcoin briefly broke through the 5k threshold today before easing back a bit.
According to an article from Yahoo, there isn’t one specific thing driving higher prices today except perhaps improving market sentiment. There was also, however, reports of a very large trade taking place to the tune of $100 million that was spread across multiple exchanges. A trade of that size has the potential to move the entire market, and it is quite possible that the transaction set off stop orders for shorts to cover and fueled buying by momentum traders.
Some recent developments may also be contributing to today’s rally. Lightning Network, and off-chain rail for crypto payments, has seen some significant progress thus far in 2019 and recently hit a fresh milestone in capacity. It was reported that Twitter CEO Jack Dorsey recently took part in a Bitcoin game called “Pass the Torch” which involves a rapid movement of money from one player to the next using Bitcoin’s lightning network. Dorsey went on to tweet that “Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand.”
Bitcoin and the crypto space may also be getting a boost today from news that a fund pegged to XRP launched on Switzerland’s SIX Exchange this week. This fund launch comes as investors still await a Bitcoin ETF approval in the U.S. If the fund is successful, it could potentially increase desire for similar products on other exchanges.
Anyone that has followed financial markets over the last year has heard of the meteoric rise and then fall of Bitcoin. The coin was trading for less than $3200 back in mid-December but has since been in the process of building what could be a long-term base.
The $4k level acted as previous resistance and some previous attempts to break out above that level quickly failed. After spending some time trading right around the $4k mark, the market has seen a significant and rapid rally higher, at one-point trading over the $5k level. Although the market is off the recent highs, a strong close today could potentially lead to follow-through buying as the fear of missing out pushes investors into the market.
It was just about a year ago that Bitcoin was trading for over $18,000 after a rapid and steep run higher. After seeing significant declines in the past year, the market may potentially now be able to mount a more sustainable trend higher. Today’s rally may be due in part to illiquid trading conditions. As the market becomes increasingly mature and mainstream, however, volatility levels may continue to decline. For the patient, long-term investor, that may be a good sign that the market is being viewed as more legitimate and as a reliable asset class.