Who Caused the 42% Bitcoin (BTC) Rally?

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Who Caused Bitcoin 42% Rally

The Bitcoin rally late last Friday added a dramatic 42% gain to its peak at above $10,000. The days before that saw seemingly disconnected “whale” transactions going to exchanges.

Chinese Traders Not the Whole Story

But then, the markets were on fire, with the common cause seen as “the Xi Effect”. The recent statement by Chinese president Xi Jinping that the country was taking a pro-blockchain stance, seemed to spark a market rally.

The most active traders, however, were not the Chinese, but Western markets, according to research by TokenAnalyst.

The level of heightened transactions continued and even expanded after the Chinese waking hours, pushing Bitcoin back above five figures. The TokenAnalyst reports that over 6,000 more transactions took place outside of the Chinese trading session, and moved over twice the amount of BTC volume.

It’s true that crypto markets don’t sleep, but this also shows that a rally in BTC is a self-expanding phenomena. Bot trading and automated activity, in addition to transfers between exchanges, may have added to the rampant activity.

BTC Transfers and Value Slow Down

Currently, the transfers over the Bitcoin network are on the decline. BTC saw around 300,000 transactions, as seen on a regular day. The value of transactions shrank in the past day, from above $1.9 billion to about $1.6 billion.

BTC on-chain activity and pending transactions often pick up during times of growing volatility, especially with growing prices. But the actual rally happens within an hour or even minutes, without warning.

The rally was followed by lowered on-chain activity as the prices unraveled. BTC sank to $9,124.93 ahead of the US opening hours on Wednesday, with the potential to erase some of this week’s gains. Trading volumes are still higher than usual at $27 billion in the past 24 hours.

It is difficult to estimate which exchange had the biggest effect or triggered the BTC rally. Most of the BTC trades are distributed evenly across crypto-to-crypto exchanges. However, markets like Binance and OKEx attract attention, as well as Bitfinex for its connection to Tether (USDT) transfers.

Smaller transfers continue, as USDT and other stablecoins allow for arbitrage and moving funds between exchanges.

Chinese traders, however, went on to support altcoins, and achieved robust gains for a basket of digital coins and tokens with interests in the Chinese market. TRON (TRX) preserved its gains at $0.020, boosted by the Huobi Global program to deposit TRON-based USDT.

Ethereum-based USDT is also highly active, picking up transfers in the past 24 hours, as shown by the Token Analyst’s data:

The supply of Ethereum-based USDT has grown to about 2.023 billion, and is currently the more active stablecoin. Leading exchanges have switched to using this type of asset, and the token transfers are also related to price action.

Omni-layer USDT has also been highly active in the past day:

As for BTC, most exchanges except for Binance see net outflows of coins.

BTC has settled to a volatility of 4.01%, with the fear and greed index at 53 points, up from 20 points during the recent sell-off event. At this point, the transfers have slowed down, and BTC seems to enter another period of relative stability.

What do you think about the recent BTC rally? Share your thoughts in the comments section below!

Images via Shutterstock, Twitter @thetokenanalyst @Whale_Alert

The post Who Caused the 42% Bitcoin (BTC) Rally? appeared first on Bitcoinist.com.


by Christine Vasileva via Bitcoinist.com

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