It is no longer surprising to see Bitcoin set new records, at least not with the mass attention the cryptocurrency has received from influential media houses and the tech/finance community. After losing some of its gains on Wednesday and Thursday, following a sell-off on the trading market, Bitcoin began recovering just in time for the weekend and kept growing until it hit a new record of over $12,000 per 1 BTC.
According to Michael Novogratz, CEO of Galaxy Investments Partners, who spoke to CNBC in the Power Lunch TV segment, these price increases could lead to more regulation from the government if the trend continues in the future. As Novogratz says, “regulators are going to get nervous” and ask for tighter regulation if the prices keep moving fast, although shutting down the cryptocurrency entirely isn’t a viable scenario in his opinion.
High Market Volume and Buying Pressure
The past week has been an eventful one, as Bitcoin’s price suffered a minor crash before surging up to new record highs. The lowest price point was reached on Thursday afternoon, when Bitcoin hit $9,362.66, while the highest value of $12,767.40 was reached this early morning.
Tied to the price decline was a high market trading volume, which even hit $10 billion on Thursday afternoon. The volume has been gradually rising since morning time and is now at $9 billion, with the market cap sitting at $212 billion and the price near $12,400. High market volume opens the door for faster price changes, so keep your eyes on your Bitcoins throughout the day.
Our technical analysis shows that buyers still have the upper hand, both on the long-term as well as short-term charts. Out of 12 moving averages, all are sending a buying signal, and 8 out of 12 oscillators are showing the same trend. The SMA 100 is above the SMA 200 with a notable difference, showing that there is less resistance to the upward path.
However, although the overall conclusion is in favor of further price increases, a swift change in trends could lead to fast losses, especially with the market seeing such high interest. So make sure you stay on track with the latest price changes.
Could Tether Harm Bitcoin?
While price increases are always great for Bitcoin holders, some concerns have been voiced about whether these jumps are realistic – particularly, whether the latest upticks were tied to the printing of new Tether cryptocurrencies.
The Tether cryptocurrency, was launched as a stable alternative to other cryptocurrencies. According to its creators, this stability is owed to the fact that every single unit is backed up by USD $1, which the Tether company claims to hold in separate bank accounts. As Bloomberg report, there are currently around $814 million Tethers in circulation, which would imply that there are USD $814 million held by the company in various bank accounts. However, some skeptics now believe that this is not quite true.
Namely, several high-profile financial media outlets have recently reported that there is no real confirmation on Tether’s back up, nor is there transparency when it comes to how the cryptocurrency is created and issued. This is even more concerning when one considers that Tether trades are partially responsible for pushing Bitcoin’s price up. Thus, as analysts confirm, if a large-scale cash-out of Tether, or Bitcoin for that matter, is activated in a Tether-supporting exchange like Bitfinex and there’s no real liquidity, it could lead to a collapse of that exchange and subsequent losses for the users, similar to what happened with the notorious Mt. Gox.