By Bitcoin Price Range in April 2019 – High: $5539.10 / Low: $4112.69
April was a very dynamic month for Bitcoin. While, admittedly, most months could be described as dynamic for a notoriously volatile asset, April nonetheless came as a welcome surprise to crypto enthusiasts.
Crypto Winter Ends
After sinking into the doldrums of “Crypto Winter” for the last 5 months, April may be the first sign of Crypto Spring. On April 1st, the price of Bitcoin spiked dramatically from around $4,0000 to close to $4,700, a 17.5% jump, in a matter of hours. By April 3rd, it broke through the $5,000 mark for the first time since November 2018.
As always, it is not exactly a clear-cut picture of what cause the sudden rally. Some media tried to point to an April Fool’s article that said the SEC was approving a Bitcoin ETF. This is highly unlikely. What is more plausible is an amalgam of other factors. Reuter’s reported a large order worth $100M spread across multiple exchanges, which likely sparked the sudden momentum. Other factors point to a large number of shorts getting closed out on Bitfinex and other exchanges.
On a more macro scale, it probably has to do with the May 2020 “halving”, when the Bitcoin mining rewards shrink 50%. There have been two halving’s in the past. Historically, about a year before each halving has indicated the start of the next bull market. This reduction in the yearly inflation rate of Bitcoin increases its scarcity, which ultimately leads to an increase in value.
Bitcoin Passes $5,400
The first few days of April were only the beginning. The bull stampede continued throughout the month. It surpassed $5,400 on April 10th, before cooling off back down to around $5,000. Some have speculated that the recent trend of IEOs, or Initial Exchange Offerings, may have led to an increased demand in BTC. IEOs are essentially just ICOs (Initial Coin Offerings) that are vetted and performed by an exchange. Binance held several recently that sold out in mere seconds. Additionally, around April 10th, rumors surrounding a ban on Bitcoin mining in China began to circulate, though this did not seem to faze the market much.
New Yearly High at $5,600
After holding the $5,000 marker for the next week, the price began to rebound. Slowly surging through April 23rd where it reached a new yearly high of over $5,600. On this day, Bitcoin performed what is known to technical traders as the “Golden Crossover”. This refers to when, on a price chart, the 50-day moving average crosses over the 200-day moving average. This is a key technical indicator that a long-term bull market is getting started. The last Golden Crossover for Bitcoin happed in October 2015. This was when Bitcoin was around $285, and it never again went below that price. So, if history repeats itself, investors have a lot to be excited about.
New York Attorney General Sues Bitfinex
However, the Golden Crossover fever high was short-lived. A few days later a bearish bomb was dropped to sow more doubt into the market. A breaking news story was dropped that the New York Attorney General was suing Bitfinex and Tether for engaging in fraudulent activity. The report said that Bitfinex, one of the largest exchanges in the world, had lost $850M. Without revealing any of this, Bitfinex then decided to take the $850M from the reserves of Tether, the dollar-backed stablecoin that is also owns. In turn, this meant the Tether, one of the most traded coins, was not backed 1:1 anymore. Thus, the market started getting worried that the dollar peg would not hold and started exit all crypto positions together, sending the price tumbling back down below $5,200 within an hour after the story broke.
However, the Tether peg surprising held strongly, and the market did not sour any further. The last week of April the Bitcoin price held firmly around the $5250 level. Shaking off news of that kind signals a huge confidence in the market. So, as April drew to a close, many Bitcoiners are coming out of their Crypto Winter hibernation to declare the start of a new bull market.