Bitcoin Nears $7.5K: Why a Bull Market Is Closer Than You May Think
Bitcoin price pumped 7% on Jan. 3 as exchanges may have tried to offset the impact of “proof of keys” and lure in new cryptocurrency traders.
Bitcoin price (BTC) is currently resting just shy of $7,500 after an impressive rally from around $6,850 on Friday, Jan. 3. Does this mean the bulls have taken control? Or is this a final relief rally before Bitcoin drops to fresh lows?
Daily crypto market performance. Source: Coin360.com
Did exchanges manipulate price action?
In last week’s analysis, I highlighted that the CME gap is becoming a regular trading event each week, and less than 12 hours after the analysis was printed, the gap filled to the exact price of $7,265, before the current trend resumed.
In this case, the price continued a five-day bear trend until it reached a bottom around $6,850 on the 11th birthday of the Bitcoin genesis block.
What happened next was a 7% pump that many speculated was largely due to the U.S. drone attacks that killed a top Iranian general. This was quite possibly the most idiotic thing I have ever heard. If my country was being bombed, the last thing on my mind would be to buy Bitcoin.
However, something else occurred on Jan. 3 that could have been responsible for both the decline prior to this date and the sudden price increase afterward, and that is “proof of keys.”
The yearly tradition was started by long-term Bitcoin advocate Trace Mayer, who has been urging users to reclaim their monetary sovereignty by removing all of their Bitcoin from exchanges and controlling their own private keys.
BTC USD 1-hour chart. Source: TradingView
Now, this may be put into the tin-foil hat category, but the volume for Bitcoin was significantly lower in the days approaching Jan. 3 than afterward. It’s no secret that exchanges rely on volume to remain profitable, and what better way is there to entice people to send their Bitcoin back to exchanges than the price pumping by nearly 10%.
Furthermore, since exchanges are technically the biggest whales out there, it wouldn’t take much to move the price up, especially during a period when the volume is low, which can be seen clearly on the hourly chart for Bitcoin.
So with this event behind us, will we see Bitcoin resume its bear trend, or are the bulls back in control?