Crypto Markets are Surging Again after “Jackass” Whale Dump; Will Bitcoin Eye $9,600?

Cryptocurrency prices were back on the offensive Sunday, as bitcoin (BTC) returned above $8,000 less than 72 hours after a mysterious whale liquidated 5,000 BTC on Bitstamp. The quick recovery suggests bull season is still in full swing despite apparent manipulation taking place in the market.

Market Update

The crypto bull market was back in full swing on Sunday, as bitcoin and altcoins surged. The total value of the asset class reached $253 billion, some $11 billion shy of last week’s high. Crypto markets have recovered more than $30 billion from the Thursday flash crash.

Cryptocurrency Market
Since bottoming near $222 billion, the cryptocurrency market has recovered more than $30 billion in value. | Source: CoinMarketCap.

Bitcoin’s price pumped to a high of $8,150.33 on Bitstamp, gaining more than 10% on the day. The cryptocurrency was last seen trading around $7,908, up 9%. BTC remains in heavy accumulation and underlying momentum is strong, according to the RSI.

Bitcoin Price
Bitcoin (BTC/USD) is returning to its yearly peak. | Source: TradingView.

All of the top 20 coins were trading higher Sunday afternoon. Bitcoin cash (BCH) was the best-performing large cap, gaining more than 13% at the time of writing to trade near $411.

Ethereum (ETH) rose 6.5% to $254.15. The value of XRP, the third-largest crypto by market cap, rose 7.3% to $0.4037. Learn why a closure above $0.4000 is so critical for XRP.

Litecoin (LTC), EOS, Binance Coin (BNB) and Stellar (XLM) each rose by at least 5.5%.

Further down the crypto market index, Dash jumped more than 10% to reach $153.39. The privacy-focused Monero (XMR) and Zcash each rose by at least 4.3%.

Why Did Bitcoin Dump on Thursday?

Bitcoin and the broader cryptocurrency market underwent a sharp and sudden correction late Thursday, a move that some took as evidence of extreme overbought conditions. That may be true, but the selloff was likely triggered by a “jackass” bitcoin whale who unloaded 5,000 units of the virtual currency on Bitstamp.

This had a direct impact on BitMEX, whose index tracks Bitstamp data. And if you recall, BitMEX recently processed more than $10 billion in daily transactions, making it the largest single market for bitcoin trades. This would have had a cascading effect on the broader market.

All this was documented by Dovey Wan, founding partner at Primitive. The self-described “shitcoin minimalist” tweeted the following insights two days ago:

The bitcoin price bottomed at $6,178.00 on Bitstamp before quickly returning above $7,000. The rally in the last 16 hours or so has virtually negated that downward correction and crypto markets are trekking higher once again.

How High Can We Go?

Predicting the crypto market’s trajectory is notoriously difficult given the volatility and manipulation that are constantly in play. Last week, Hacked floated the idea that the year-long bear market has been negated now that bitcoin has returned above $6,800. However, other analysts are looking for a clear and sustained break above $8,350 to confirm the end of bearish bias.

Cryptocurrency analyst Josh Rager has provided additional insights on bitcoin’s potential path and how it may influence the broader market.

In a recent Twitter post, Rager said immediate resistance is located just above $8,200. A sustained break above this level would lead to a pump that targets $9,600 and beyond. Bitcoin last traded up at these levels in May 2018.

If recent history is any indication of the way forward, a five-figure bitcoin would likely come with a higher dominance rate – meaning more capital flowing into BTC relative to altcoins and tokens. Bitcoin and alts are still connected at the hip, but capital flows clearly show cycles to and from the two domains.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via CoinMarketCap and TradingView.

Author:
Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi