Many supporters of Bitcoin [BTC] and the rest of the cryptocurrency market have tried to pinpoint the exact reason behind the recent bull run. A report from Tuur Demeester’s Adamant Capital has tried to do the same. The report stated that after moving sideways for 12 days between a range of $7000 to $8000, the chances of Bitcoin hitting $11,000 was possible if it continues its uptrend.
In previous reports, Adamant Capital had touched on factors such as accumulation by family offices and institutions and significant short squeezes, with the involvement of investors exiting “embattled exchanges via Bitcoin withdrawals.” The company has revealed that there was another major factor correlated to the price fluctuation, namely China’s involvement with the United States and the ongoing trade dispute. The report said,
“… it appears we underestimated one factor: capital flight from China. On May 5th, the Chinese Yuan started weakening against the US dollar, and 13 days later traded 2.5% lower — a huge move in Forex terms. Remarkably, that was also the week that bitcoin broke above the resistance of $6,500. In short, there’s a significant chance that in fact it was Chinese investors who pushed bitcoin in bull market territory this year.”
Adamant Capital’s report further sourced historical data and connected it to Bitcoin’s current atmosphere. The release claimed that in early 2016, the reason why a lot of investors went long on Bitcoin was the Chinese capital flight. There was also a mention of China’s Bitcoin OTC desks thriving with Arthur Hayes, Chief Executive Officer of BitMEX, adding,
“Make no mistake, just because you don’t see Okcoin and Huobi putting up big volume numbers in China, doesn’t mean they have stopped serving the Chinese market. The OTC market is vibrant, and these venues have found politically acceptable ways to allow buyers and sellers to meet in China.”
The Tuur Demeester-led company further pointed out that Bitcoin’s present parabolic curve represents the fastest increase in unrealized profits since January 2012. This piece of information was also used to derive that if BTC realizes $9000 as the top, then a price crash may occur, causing BTC to settle between $6800 and $7680.
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