The top-ranked crypto by market capitalization has in the last 48 hours risen to $10,000 and fallen to $8,600 with a recent attempt at regaining the $10k price mark rejected causing the current 60-day volatility to hit 13.81%.
Meanwhile, anticipation continues to build among BTC proponents of a likely bull run sparked by the imminent block reward halving. The network is also experiencing a massive spike in on-chain activity with spot volumes reaching levels not seen since the height of “crypto-mania” in late 2017 when the Bitcoin price nearly eclipsed the $20,000 milestone.
Wild Volatility Swings for Bitcoin Price
The Bitcoin price briefly flirted with the $10,000 mark but has since been rejected with the $10,100 level providing stubborn resistance to any continued upward trajectory. Bitcoin’s move above $10k had come after shedding more than $1,700 on Sunday (May 10, 2020) as a cascade of long position liquidations swept the crypto derivatives scene.
Indeed, over $1.3 billion in crypto longs and shorts were wiped out on Sunday with long bets accounting for the greater majority of the liquidations. BitMEX, regularly in the news for massive liquidations saw traders in long positions losing over $275 million.
Given Bitcoin’s resurgence in late April, bullish sentiments seemed to spur traders on derivatives exchanges to enter into overleveraged long positions. However, with the Bitcoin price unable to break the $10,100 resistance during the climb, a cascade of liquidations occurred which saw BTC falling below multiple support levels on the way to likely bottoming out at the $8,500 price mark.
Paul Tudor Confirms Bitcoin Stash
Meanwhile, legendary billionaire investor and the latest mainstream market stakeholder to recognize Bitcoin, Paul Tudor, has doubled down on his newly found appreciation of BTC. Tudor first sent shockwaves through the crypto space in his May 7 letter to investors describing the top-ranked cryptocurrency as a hedge against inflation especially during the ongoing uncertainties caused by coronavirus pandemic.
“The digitization of the world clearly benefits Bitcoin […] When you think about every bull market, there’s one common thread: an expanding universe of people who own it. The estimates are between 55 and 70 million people own bitcoin. If you’re buying bitcoin, you’re betting that number [will go up].”
The upcoming halving arriving at a time when the world is almost in total lockdown due to COVID-19 has also served to increase enthusiasm among Bitcoin proponents. Some pundits argue that BTC’s haven asset narrative will be entrenched by its performance in the coming months as countries grapple with the realities of dealing with the viral pandemic.
On-Chain Metrics Spike as Halving Looms
Bitcoin transaction volume is currently nearing levels last seen during the late 2017 bull rally. Crypto exchanges are reporting massive accumulation especially by retail traders looking to ride the wave of the coming halving.
“Halvings have typically caused the price of Bitcoin to set a new all-time high. Thus, it is no surprise to see retail owners stacking sats as they hope to make huge gains once the BTC price goes parabolic after the halving.”
Apart from transaction volume, other on-chain metrics like hash rate and the number of active addresses have also gone through the roof. With the halving only hours away, Bitcoin’s block time has also reduced significantly with an average of 4.7 minutes between blocks as against the theoretical standard of 10 minutes.