Those throwing in the towel after 3 weeks of tediously uneventful trading apparently weren’t patient enough.
Bitcoin is up by over 10% over the past 24 hours. It actually hit $500 exactly on Bitstamp ($488 on BTC-e) 12 hours ago and is now threatening that level again. This follows what seemed to many as an interminable period of flat trade in the $440 range.
What’s odd is that nobody really knows why, at least at the moment. Some have offered weak arguments including the success of the recent Amsterdam and Beijing Bitcoin conferences, less negative press emanating from China and a string of recent product launches. These developments, while fine and pleasant for Bitcoiners to hear, are better equipped to explain a market if such a rise occurred gradually over the past week- not a sudden jump, the bulk of which took place over 3 hours.
Over the past 24 hours, Bitcoin has actually gotten some negative light in the press amid reports of renewed investigations into Bitcoin businesses and potential connections to Silk Road by U.S. authorities. Apparently, it hasn’t spoiled the party.
Equally odd is the altcoin performance today. While most are up, price movement is muted. Some are up by a mere 1-3%, which happens on your average day.
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Altcoin markets generally mimic Bitcoin’s major moves. More often, these moves are amplified two-fold. Litecoin (LTC) should be up by 15-20% not a mere 3%.
More significant is LTC’s price relative to Bitcoin. LTC/BTC is deep in the red, down by 7% to 21.7 mBTC. This is its lowest level since March when it very briefly touched upon 20.5 mBTC during a period of flash selling in crypto markets. Looking at prices which held for more than a few moments, today’s is the lowest since the great crypto craze and crash last December.
Litecoin has indeed been underperforming over the past 3 months. The crypto world has been getting less impressed with Litecoin as it seeks future direction amid struggles to defend against ASIC mining- one of its original mandates when founded.
Today though, there are two possibilities: traders may be starting to become equally unenamored with altcoins in general. Perhaps excitement is waning as they realize many of these coins are a disposable commodity, a dime a dozen.
Also possible is that there was simply a massive, unbalanced string of buy orders specifically in the bitcoin market, which in turn set off of a chain reaction of buying from traders looking to go to the moon. On Bitstamp, volume peaked at over 4000 BTC an hour during the 3 hours of sharpest ascent. Since then, volume has returned to normal, 300-500 BTC an hour.
One should therefore not be surprised if the rally fizzles over the next 2-3 days in the event traders take profits while seeing no fundamental changes to Bitcoin’s value.