As I write this, Bitcoin has decisively climbed above $5,000 for a third consecutive day of gains. The latest rally for the leading cryptocurrency has been strong: the pioneer moved from an uncertain support near $4,000 to successively breaking several important resistance levels. Now, Bitcoin stands above $5,100. The rest of the altcoins have largely followed Bitcoin’s lead, and the market overall shows a significant recovery. With double-digit gains across many major cryptocurrencies, this week could become the best-performing since May 2018. But what triggered such a rapid surge in the prices of top cryptocurrencies? Below are several theories and relevant data.
Rumor: Russia may have purchased up to $8.4 billion in Bitcoin
The rumor spread quickly across social media after a prolonged stagnation that affected the market for several months. Following an extended period of stabilization that unsettled traders used to volatility, the rebound was swift and decisive. Although several technical indicators had suggested a recovery, a number of key resistance levels still needed to be broken for traders to adopt a clearly bullish view. Now, sentiment appears to be shifting away from pessimism.
How did the surge happen so fast? According to Russian economist Vladislav Ginko, much of the capital that entered the market this Tuesday came from Russia. In an interview with Bitcoinist, Ginko outlined his bold theory. He claimed that several companies and wealthy individuals bought a large quantity of bitcoins, driving the market higher, which ultimately follows the law of supply and demand. The motive, he said, would be U.S. sanctions that could limit the use of dollars to trade gas and oil. He stated in the interview:
“About 1.8 million BTC were purchased by companies and wealthy Russians. There is no direct participation from the Russian government, but some of those who bought bitcoin expect potential U.S. sanctions to make international transactions difficult, so they buy BTC as a way to evade sanctions.”
Mysterious buyer or trading algorithms?
Other investigations point to different suspects. One possibility is hedge fund algorithms—automated trading systems similar to well-known trading bots but on a much larger scale. A Bloomberg report describes how the move occurred at the start of the Asian trading day. According to Oliver von Landsberg-Sadie, CEO of BCB Group, an automated trading software may have executed trades across multiple venues.
As various outlets report, the push came from a mysterious order executed simultaneously on three exchanges. Oliver also told Reuters that coordinated purchases of more than 7,000 BTC were carried out concurrently on Coinbase, Kraken and Bitstamp. Whoever the “culprit” was, this behavior acted as a catalyst that restored market confidence. Forty-eight hours after that initial surge, prices continued to climb with momentum.
Technical reasons behind the rise
While those orders sparked the move, several technical factors also supported the rally. Looking at the 4-hour chart for BTCUSD, the pair moved out of oversold territory in late March, as indicated by the relative strength index (RSI). Additionally, a bullish TK cross appeared in the Ichimoku cloud on March 29. A similar signal appears on the daily chart at the end of February, although it no longer shows on the weekly chart.
These technical signals, combined with the decisive breach of sell walls on order books, may have laid the groundwork for what is becoming the most significant weekly bullish impulse in about a year.
Key takeaways: What numbers did this latest surge produce?
Despite the rally, overbought readings for some digital assets have raised concerns among certain investors. In terms of total market capitalization, the data is approaching the first major resistance since the break below the $6,000 support—a critical level for BTC in 2019. According to CoinMarketCap charts, the market recovered over $33 billion between Tuesday and Wednesday. As a result, the total capital across all cryptocurrencies shows its strongest balances since November 2018.
As noted earlier, alternative cryptocurrencies followed Bitcoin’s lead. Some saw modest gains while others experienced substantial moves. Below is a summary of the top performers over the last seven days:
- Litecoin (LTC) and Bitcoin Cash (BCH) were among the rally’s standouts. BCH appreciated nearly 90% over the past week. Meanwhile, Litecoin sits above $93 (a level we highlighted in our recent LTC technical analysis) and gained more than 50%.
- Dogecoin (DOGE) benefited from a mention by Elon Musk and posted over 68% gains.
- Cardano (ADA) surged about 46.7%.
- Also posting notable gains near the forty-percent range were NEM (XEM), NEO, Tezos (XTZ), Dash (DASH) and Bitcoin SV (BSV).
Is a bull market confirmed? Share your view in the comments section.