When Bitcoin crossed $5,000 mark on Tuesday, there were a lot of doubts around the way in which things unfolded. A 15% rally within a few hours is something that wasn’t seen since October, so its sudden comeback without any major visible reasons left many analysts scratching their heads. I too didn’t focus on the reasons while reporting the development and left them to be covered in a separate post. Now in this post I’m going to focus on those things, as some views have also emerged from prominent analysts regarding what might have happened. Here we’ll take a look on all those views.Probably the biggest catalyst behind this rally was a mysterious 20,000 BTC (around $100 million) order spread between multiple exchanges. The order was discovered by Reuters, and according to them the order was spread between Coinbase, Kraken and Bitstamp exchanges. The order, according to analysts, was managed through algorithms, and if observed closely then one can easily figure out that there were synchronized, in-concert units of 7,000 BTC volume in an hour on all these exchanges before the major rally. Who this unknown whale was behind the massive volume is not known yet.Another reason being suggested as a possible catalyst is Brexit. Some believe that investors of the British economy may be swapping some of their wealth for Bitcoin as Britain’s split from the European Union comes closer (it’s scheduled to happen in mid-April). There’s big money involved in Britain, so when it comes out at least some of it is certainly going to come to crypto space too.Bloomberg author Eric Lam also suggests that an April Fool’s Day story about SEC approving Bitcoin ETF might also have played some speculative role in pumping the price of Bitcoin. A number of other too-good to be true stories about cryptocurrencies were also published that day. This possibility can also not be denied, because people often believe the information that they see firsthand without confirming it from any official sources first.Besides all these reasons there’s also at least one prominent analyst who feels that Bitcoin might have jumped without any necessary catalyst. Tone Vays, who is known for jumping into crypto space from his comfortable and secure position of a Wall Street executive, recently spoke to Cointelegraph about the 15% Bitcoin rally. And here’s what he had to say:“Shorts are liquidated, there were short squeezes, more people jumped onto the hype, and a lot of news media always look for a trigger to cause big drops and big rises. I would say more than half the time they are just trying to match news to something that it did not necessarily need news to happen.”This reasoning also has some degree of truth to it. Markets don’t always require any particular reason to go through sharp moves. A few big fishes can move the market sharply in either direction depending on their preferences, and that happens more frequently in non-regulated markets like crypto.It’s possible that one or more of these reasons might have played a role in the recent rally of Bitcoin. To me, the most probable reason seems that $100 million transaction done by some whale. And if that was the case, the market may also correct as sharply as it spiked. When does it correct is another question though, and we’ll have to wait to find out the answer.
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