Bitcoin’s sudden price increase last Thursday resulted in gains across cryptocurrency markets, with Ripple, Ethereum and Litecoin’s value all going up.
On Thursday, April 12, Bitcoin’s price went up to more than $1000 in just an hour. This is also the first time Bitcoin broke above $8,000 since March.
The movement of the world’s biggest cryptocurrencies usually reflects across other digital currencies, and this unexpected spike was no exception.
Ethereum, with a market cap of about $45 billion, went up by 10% in price, taking it close to $500. Ether peaked at $1,300 per coin in January.
Similar gains in percentages were also experienced by Ripple, the third largest cryptocurrency next to Bitcoin and Ethereum.
Dramatic market movements in the ever-volatile cryptocurrency industry are not unusual. They are often triggered by good or bad news involving regulation and laws.
However the latest spike in bitcoin price does not seem to be related to any significant news in the industry. However, some analysts are suggesting the gains are due to a change in sentiment among investors.
“In this scenario traders with short positions will start to lose money and liquidate their positions into buying bitcoin,” said Ed Cooper, head of mobile at Revolut, a fintech startup.
This causes the price to rise further and as more people start to notice the rise, they buy in for a quick gain. This continues the cycle,” he added.
Despite the gains, investors are advised to remain cautions when betting on a positive direction of the market beyond the short-term.