With Global Stocks in Meltdown, Bitcoin Blows Past $8,000 as Volumes Surge
Bitcoin’s historic recovery intensified Tuesday morning, as trade volumes continued to surge in what appears to be a perfect alignment of catalysts ranging from fundamental news to fear of missing out (FOMO).
The bitcoin price zipped past $8,000 late on Monday, the product of a relentless rally that gathered steam last week. The largest and most influential cryptocurrency peaked around $8,200 on Bitfinex and was last seen hovering just below $8,050. That represents a gain of 3.6%.
Compared with 24 hours ago, bitcoin’s price has gained a staggering 14.5%, according to CoinMarketCap. Prices are up 36% over the past seven days, 59% in the past month and 116% since the beginning of 2019.
Bitcoin is in an accumulation frenzy and nobody is selling, according to the accumulation/distribution line. This suggests further gains may be on the horizon as the fear of missing out compels more people to buy the virtual currency.
Bitcoin’s market capitalization has swelled to $144 billion, the highest since last summer. At current values, BTC accounts for roughly 60% of the cryptocurrency market cap, itself a multi-year high.
What exactly is going on? Read: Five Reasons Why Bitcoin is Surging.
Real Trade Volumes Surge
BitMEX CEO Arthur Hayes took to Twitter on Sunday to announce that his exchange has processed a record amount of bitcoin trades, a strong sign that the bullish breakout is being driven by real market activity and not just some form of manipulation.
New record for BitMEX trading volume. Praise be to volatility and our wonderful traders! pic.twitter.com/iLMGdpz65n
— Arthur Hayes (@CryptoHayes) May 12, 2019
BitMEX, a popular cryptocurrency derivatives platform, processed more than $10 billion in trades over a 24-hour period. As of Tuesday, BitMEX was responsible for more than a fifth of bitcoin’s exchange-based turnover, according to CoinMarketCap.
The Chicago Mercantile Exchange (CME), which runs the largest bitcoin futures market, also announced that trade volumes eclipsed new highs at the start of the week.
On Monday, the CME bitcoin futures contract recorded $1 billion in trades, which is nearly double its average daily turnover.
Uncorrelated or Negatively Correlated?
Regardless of how you define bitcoin’s correlation with the broader financial system, it has been virtually immune to the carnage in global stocks. On Monday, $1 trillion was wiped from the global financial markets after China announced retaliatory tariffs targeting some $60 billion worth of U.S. goods.
Wall Street and global stocks sold off sharply on the news, with the Dow Jones Industrial Average falling more than 700 points during the session. It would eventually settle on a loss of 617 points.
Trade-war jitters also weighed on the yuan renminbi, which fell on Monday to its lowest level since December.
Asian stock markets fell again on Tuesday, with China’s Shanghai Shenzhen CSI 300 Index falling 0.6%. The benchmark gauge is down 8.6% over the past month.
European stocks and U.S. futures appear to be rebounding on Tuesday as investors await the Trump administration’s response to China’s tariffs. As Bloomberg reported Monday, the U.S. Trade Representative’s office is preparing new tariffs targeting $300 billion worth of Chinese imports. Products ranging from mobile phones to children’s clothing will be taxed at the maximum rate of 25%.
President Trump and China’s Xi Jinping are not scheduled to meet again until the next Group of 20 summit in Osaka, Japan on June 28-29.
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. Chart via TradingView.