The surge in bitcoin on Tuesday has put the digital currency on the precipice of entering rarefied territory for the magnitude of its recent rally.
By early afternoon trade, a single bitcoin
fetched just shy of $5,000, up 19.8% on the day, marking its biggest one-day rally since Dec. 11, 2017, and the fifth largest daily jump in more than five years, according to Dow Jones Market Data.
Amidst all the bitcoin madness, the cryptocurrency has logged just five sessions of gains greater than 20% over the past five years.
And if it feels like some investors have been caught flat-footed by the price surge in an asset that has come to be known for its sometimes seismic gyrations, you’d be right. March marked the narrowest trading range for bitcoin since early 2017 and the cryptocurrency closed out the first quarter of 2019 with a trading range of 25%, the tightest price range since 2015’s second quarter.
“It feels like a blast from the past when I look at a bitcoin chart this morning,” said Craig Erlam, senior market analyst at Oanda. “Every time we’ve traded around $4,200-4,400 since late November, [the] price has peaked and headed south.”
Gains for the world’s No. 1 digital currency have come despite a string of news updates that would normally be bearish for prices.
On March 29, two bitcoin-backed exchange-traded fund proposals were delayed by the Securities and Exchange Commission, and on March 15, the Cboe said it was throwing in the towel with its bitcoin futures offering.
But if history has taught us anything about bitcoin, it is that the market should expect the unexpected.
Now, with bitcoin firmly off its December 2018 low, shades of 2017’s halcyon days — where prices soared to nearly $20,000 a bitcoin in December of that year — are starting to re-emerge:“What matters more is what happens AFTER the rally. If investors don’t immediately sell into the strength, then it indicates we’re not quite to an equilibrium yet,” wrote Jeff Dorman, CIO at Arca in a note to MarketWatch.
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