Bitcoin breaks out
Bitcoin (BTCUSD) showed a quite astonishing gain yesterday of 17% to a shade over $8,000 and confounding (at least for the time being), those who remain sceptical of the Second Coming of Crypto. However, one swallow doesn’t make a summer, and it’ll be interesting to see where it goes from here. Although one can assume that some sizeable shorts were unwound, this simply underlines the immaturity of the crypto market. The lesson here is that there simply isn’t enough liquidity to absorb an increase in trading volumes, and that leaves any market open to being pushed around by those with deep enough pockets to do so. The mere act of unwinding Shorts does not necessarily presage a change of sentiment. There can be many reasons for doing so, and the one certainty is that it frees up capital for further investment. Of course, there is no reason to suppose that that further investment will remain in cryptocurrencies, only time will tell. Holders of BTC will be cheered at ending the week with some positive events, an outcome that has been rare of late.