It’s no secret that yesterday was an exciting day for crypto investors, with Bitcoin surging over 40% from lows of $7,300 to highs of $10,600, before losing steam and reeling back down to the lower-$9,000 region.
It remains unclear as to what exact factor catalyzed this movement, although some analysts and investors are noting that the rally coincided closely with the Chinese President reportedly giving claiming that he intends for China to be the global leader for blockchain technology, which could have been an effective “green light” to prospective Bitcoin and crypto investors.
Were Chinese President’s Comments Bitcoin Rally Catalyst? Analysts are Torn
Yesterday Bitcoin incurred a meteoric rally, the likes of which have only been seen on a small handful of occasions over the cryptocurrency’s history.
This rally came just a few hours after news spread regarding President Xi’s comments regarding blockchain technology, and analysts are torn on whether or not his comments were truly the catalyst behind this movement.
Misha Lederman, a popular figure within the cryptocurrency markets, aired on the side of supporting the aforementioned notion, saying:
“This is what happens to #Bitcoin when the President of the most populous country & soon to be largest economy in the world, China, openly calls for accelerated #blockchain investment & development. Potentially a major catalyst to the next #crypto bullrun.”
This is what happens to #Bitcoin when the President of the most populous country & soon to be largest economy in the world, China, openly calls for accelerated #blockchain investment & development.
Potentially a major catalyst to the next #crypto bullrun. pic.twitter.com/ldbpW6loEh
— Misha Lederman (@mishalederman) October 25, 2019
Alex Krüger – an economist who focuses primarily on cryptocurrencies – offered a slightly different perspective on the issue, noting that interest in Bitcoin stemming from searches originating in China only saw a minor uptick following the news.
“Interest in Bitcoin in China has barely edged up. Chart shows Baidu searches for Bitcoin (blue) vs Blockchain (red). Looks very conclusive to me, particularly so given the price spike,” he explained while pointing to the below chart.
Interest in Bitcoin in China has barely edged up. Chart shows Baidu searches for Bitcoin (blue) vs Blockchain (red). Looks very conclusive to me, particularly so given the price spike. pic.twitter.com/UGwU5416jO
— Alex Krüger (@krugermacro) October 26, 2019
Beyond simply some potentially bullish news surrounding China’s policies towards cryptocurrency, it is important to note that there are technical factors that could have been driving this movement.
Joseph Young, a popular cryptocurrency analyst on Twitter, spoke about some of these factors in a tweet, pointing to the massive amount of short positions on BitMEX prior to this movement (possibly making this a short squeeze) and a slight uptick in trading volumes on Bakkt as two other potential causes behind this movement.
“Bitcoin just went past 10,000. Just wow. I have to say this seems like the China effect + big mex short liquidations + very very little bit of bakkt sentiment. Incredible,” he concisely stated.
Bitcoin just went past 10,000
Just wow. I have to say this seems like the China effect + big mex short liquidations + very very little bit of bakkt sentiment
Incredible
— Joseph Young (@iamjosephyoung) October 26, 2019
The coming few days will likely illuminate whether or not this movement was truly one of substance that will lead it significantly higher, or if it was simply a short-term movement that was the result of a short squeeze that is followed by further downside.