After a major downturn in the price of Bitcoin earlier this month, the world’s leading cryptocurrency posted a 4 percent gain in less than 24 hours. As of September 9, Bitcoin was trading at a value of $6,450 even as some analysts had predicted a vertiginous drop towards the $5,000 level. This unexpected recovery has sparked new discussions related to the state of the digital currency market, which is trying to return to the glorious days of 2017.
Recent Bitcoin sales volumes have been attributed to one of the digital wallets that used to belong to Ross William Ulbricht, the infamous founder of the Silk Road underground market; one of his wallets ended up being confiscated by the United States Drug Enforcement Agency, but others that were not seized are believed to be anonymously managed by individuals who may or may not have been associated with Ulbricht.
Large Bitcoin transactions have an effect on the digital currency markets, and this is a problem insofar as stability. The Bitcoin market is dominated by a small percentage of “whales” who have amassed considerable amounts of tokens; whenever these investors exchange their cryptocurrency holdings into fiat, the market is bound to react in a downward price direction, which in turn prompts technical traders to take advantage of the sudden buying opportunities.
Seasoned Bitcoin traders point out that their favorite digital currency has previously shown higher volatility in the range between $6,000 and $10,000; for this reason, investors should not be surprised by 4 percent spikes. In the past, 10 percent shifts in 24 hours were common, but this was at the height of the volatility period and before hedge funds and Wall Street showed interest in this investment asset.