Bitcoin is once more heading towards $7,500 after drawing a curve on the price charts last week supported by increased trading interest. Like Forbes reported, BTC price reached a one-month peak yesterday, pulling other digital currencies along with it. In the course of Monday to Tuesday, Bitcoin grew 2.2% to reach its highest price point since August 4th. And as Bitcoin grew so did the rest of the cryptocurrency market, reaching a total value of $240 billion or 1.4% more than Monday.
According to Forbes magazine, Bitcoin’s latest price movements are creating “mixed signals” as to where the cryptocurrency will head in the upcoming weeks, leaving investors with uncertainty as to what to do next. Nevertheless, experienced market watchers suggest that the stabilizing of BTC/USD price is a positive sign, one that could lead to more gains in the upcoming months.
A Big Sell-Off Imminent?
Since our last update on Wednesday, Bitcoin’s price has jumped from a low point of $6,834.49 on Thursday evening to a peak of $7,359.34 on Tuesday night. Looking at the 24-hour trading volume, it seems that there was increased interest in buying Bitcoin during its lowest value, with the volume even coming close to $5 billion during one point. Today’s figures likewise show an increase in trading volume to $4.46 billion, which could lead to faster price changes. The market cap, on the other hand, is at $127.2 billion or approximately $6 billion more than last week.
Our technical analysis shows that the market is in a buying mood, although not a strong one since only 4 out of 12 technical oscillators are sending a buying signal and 7 out of 12 moving averages are also in the green zone. The SMA 100 is still over the SMA 200, showing there’s less resistance to the upside, which is a positive sign.
However, according to online reports and rumors, there might be a dump of $1 billion worth of BTC from an unidentified source (Mt.Gox and Silk Road wallets suspected) coming soon. The massive sum of coins has already been dispersed across a number of exchanges, which raises concerns of a planned sell-off that could drive Bitcoin’s price below $7,000 again.
Bitmain Looking to Raise $1 Billion
In other interesting news, Bitmain Technologies, China’s largest company for producing BTC mining rigs, is looking to raise $1billion in a pre-IPO (Initial Public Offering) with more money hoped for in the subsequent IPO. Namely, according to Financial Times, Bitmain is also thinking about offering an initial public offering in the future with hopes of the company reaching a value of up to $40 billion within the next three years.
What’s surprising to note here is that the mining company is asking for funds in times when demand for Bitcoin mining rigs is declining while Bitcoin’s price is less than half of what it was during its peak. The company reportedly generated revenue of $2.5 billion in 2017, while the first quarter of this year brought Bitmain $1.86 billion, over 90% of which was from selling mining rigs. But in the past months, things were looking less peachy for the industry.
As reported by FT, demand for mining rigs has dropped significantly in China. Up until last year there was big interest in the country for mining from domestic buyers but also Russians and Saudis who have since stopped visiting. Reportedly, at many stores around China prices for rigs have dropped nearly 90%, which leads some to suspect that a different “angle” may be in play with Bitmain’s IPO.