What an exciting weekend price action the crypto world has just witnessed.
Bitcoin growth of over 40% in the range of 24 hours was an event that had not been experienced since 2011. According to crypto asset analyst Yassine Elmandjra, this was BTC’s third-highest move but possibly the most impactful since in 2010 and 2011 – when the previous moves happened – the price was easier to shift ($0.40 and $5.65).
Moreover, it happened at a time when most experts and technical analysts were predicting a significant drop of the top cryptocurrencies, bringing down the whole market with it.
This is history by now, but it’s worth remembering what happened and what caused the spike.
On September 23rd, Bitcoin lost the resistance level of $10,000, and on 24th, it dropped from $9,700 to a low of $8,300. We would not see $10,000 again, until Saturday 26th October, well after one month.
On 23th October bitcoin found a new low in $7,300 with many experts expecting further drops and a fall back into a bear market, all the way to the $6,000 area.
We wrote on Friday that the Facebook hearing did not look good for the whole crypto market and that it was enhancing the chances of new dark times.
Yet, on Saturday, the news coming from China resonated across the world apparently triggering the new parabolic rise that day.
China President Xi Jinping openly endorsed blockchain technology in a speech and encouraged the country to boost developments and take the lead in the space.
The price briefly spiked to $10,300 in the early hours of 26th October (Central European Time) in a rally that brought the whole cryptocurrency market to new recent highs.
A tweet on Sunday highlighted the impact of that announcement on dominant Chinese social media network WeChat:
WeChat searches (10/23/19):
– 区块链 (Blockchain): 777K
– 比特币 (Bitcoin): 572K
WeChat searches (10/25/19):
– 区块链 (Blockchain): 9.2MM
– 比特币 (Bitcoin): 1.3MM
The news received exceptional reception globally due to the proverbial opposition of the Chinese government to cryptocurrencies and the whole field. In 2017, Beijing had taken a tough stance on cryptocurrencies, banning ICOs and forcing major trading platforms to shut down.
Now, the People’s Bank of China (PBOC) is even ready to issue its own digital currency to compete with Facebook Libra and reduce the costs imposed by the management of paper money.
As a result of the announcement, along with BTC, major Chinese altcoins and blockchain-related projects claimed the best gains with Neo, Ontology, and Bytom leading the way.
NEO jumped nearly 60% in a couple of days from $7 to $11.50.
Ontology (ONT) moved from $0.55 to a high of $1.09 on Sunday, recording a jump of 50%.
Bytom (BTM) gained the biggest rise from $0.052 to a high of $0.21 yesterday with a massive 300% increase.
All Chinese coins are now back to red at the time of writing, but traders surely enjoyed the massive moves over the weekend.
What now for bitcoin and the whole market?
At the time of writing bitcoin is sitting in the $9,300 range. The levels to watch out are $9,100 for a bearish signal and $9,800 for a break to the upside.
We’ll see in the next few hours how the market reacts to the news that Bakkt will launch a consumer app in the new year with Starbucks as a special guest tester.
Prophecy of anonymous Nchan user of a $16,000 BTC by the end of October seems to be fading away, though, to the disappointment of hopeful bitcoin and crypto enthusiasts.
Heart Image via Pixabay