Since we are talking about an emerging industry that is still in process of receiving regulation is difficult to take into account all aspects of a developing market, especially when that space is represented by cryptocurrencies, some of the most volatile financial products of the moment.
The massive Bitcoin rally from April 2nd 2019 seems to have taken all of us by surprise though the specialized blockchain media did announce over the last months several positive developments in the cryptocurrency market. But the bear market of 2018 seemed to last forever and some people have naturally become disillusioned with the cryptocurrency space.
And yet, light seemed to sparkle from the other end of the tunnel with Bitcoin getting back on an ascending track and investors waking up to catch the ride to the moon.
Let’s see the main reasons Bitcoin is back at $5,000.
History of Bitcoin market cycles
Nothing lasts forever and even a Bitcoin bear market needs to end at some point. Starting after the massive Bull Run in December 2017, the 16-month descending trend had to stop eventually.
Was there any sign that the present bear market was approaching the end? Maybe yes, maybe no, it depends on the person you’re talking to. But if history can be of any help, simply by looking at Bitcoin’s 10-year track record, we can see the numerous ups and downs of the first digital currency built on blockchain technology.
Some analysts in the crypto market often go into comparing the 2018 bear market with the one that occurred back in 2014-2015 and lasted for about 19 months losing on the way a similar 80% in price.
So, even though we were only 3 months away from the longest bear market in history, we need to highlight that the general interest, from mainstream public to investors and regulators, is now obviously at another level from what we saw 4 years ago.
Growing number of Bitcoin transactions
Many crypto analysts pinpointed to the increasing number of transactions experienced by Bitcoin at the start of 2019 as the main trigger for the rise in price that took place on April 2nd.
The growing number of transactions, including the ones taking place on Bitcoin Lightning Network, acted as a clear indicator that something had to give and Bitcoin’s price had to decide on an upward direction.
At this moment, with investors’ interest being renewed by new developments and general public starting to catch up with media reports, Bitcoin daily transactions are about to reach their all-time highs from December 2017 when Bitcoin price went up to the moon to hit $20,000.
Bitcoin popularity increases every day
People become more and more used to hearing about Bitcoin and the blockchain-related projects that enter the mainstream market.
As they hear whispers of a technology that promises security and privacy from state control, people want to find out more about it. So, they go online on Google or Baidu (in China) and look for “Bitcoin” or “Altcoins”.
According to Google Trends, in the last 30 days alone the number of online searches for Bitcoin and crypto related terms grew spectacularly with people looking to discover where they can find the nearest crypto ATM machine or which digital currency to choose for their investment.
We presented above just a few causes that can explain, at least to some point, the Bitcoin’s official return to public attention. Though one can just focus on a single event that produced Bitcoin’s jump to $5,000 – such as the mysterious order of 20,000 Bitcoin in just 30 minutes – we need to consider the overall context and sentiment existing in the market in order to have a better picture of the cryptocurrency world.
Though most people cannot purchase 20,000 Bitcoin all of a sudden, rich investors or “whales” wouldn’t look to access the space without making sure that millions of people will join the space in the foreseeable future allowing them to make profit.
Since everybody is now looking at Bitcoin and the overall industry, we expect other spectacular movements to occur in the following period.