Bitcoin Price Struggles may Come to an end
No one in the world of cryptocurrency is all too happy with the way the markets have evolved over the past few days. The (still unconfirmed) news that China had banned cryptocurrency exchange services spooked the market once again. The rumor gained traction because it came on the heels of the confirmed ICO ban in the country. Then again, until we have some official confirmation from Chinese government officials regarding the situation, it is safe to assume there is no ban whatsoever. Now that the world is slowly realizing this fact, the Bitcoin price is gradually moving up again.
More specifically, we have seen a 3.17% Bitcoin price gain in the past 24 hours. This is rather surprising, considering the whole market remains spooked by the rumors originating from China. Then again, the cryptocurrency markets have a tendency to rebound most strongly when people least expect it. It is not the first time we have seen a Bitcoin price dip, although it will certainly not be the last time either. The Bitcoin market is still pretty volatile sometimes, and this past weekend was a perfect illustration of that point.
Having entered the workweek, the Bitcoin price now hovers around the US$4,150 level. It is not the US$5,000 value most people would like to see right now, but there is no reason to think the Bitcoin price won’t hit that threshold sometime in the coming weeks. As long as the trading volume keeps up, there is no reason to be concerned whatsoever. Bitcoin has seen US$1.56 billion of trading volume in the past 24 hours, which is a bit lower than most people have grown accustomed to of late.
No one will be surprised to learn Chinese exchanges are still contributing a lot of Bitcoin trading volume right now. While Bitfinex is still dominating the market, OKCoin, BTCC, and Huobi are also among the top 4. This further confirms there is no exchange ban in China to speak of; otherwise, these companies would have no Bitcoin volume whatsoever. It is true the Chinese exchanges still value Bitcoin a lot lower than most people would like, although the US$600 arbitrage gap is slowly shrinking. There is still a US$300 price difference, though, but given enough time, this situation will rectify itself.
Assuming there is little to no truth behind China’s alleged ban on exchange activities, the bigger question is why this rumor was created in the first place. There are different theories out there regarding this news. Although it is evident this was an attempt at manipulating the Bitcoin price, it seems this effort was in vain. After all, news like this would, under normal circumstances, drive the Bitcoin price down by a lot more than we have seen over the weekend. Such a freefall never materialized, which is a good sign.
Even though the Bitcoin price is showing some signs of recovery, it is still too early to get overly optimistic. Remaining cautious is the best approach for now, as there is still a lot of volatility capable of influencing the Bitcoin markets in the coming days. However, the signs are slowly pointing in the right direction again, which is all anyone can ask for at this point. Reaching US$4,250 is the next stop for Bitcoin, but no one knows if it can happen today.