Bitcoin price shot 4% on Thursday to surpass $9800 levels along with a sudden spike in the Open Interest. The community is enthusiastic about the upcoming Bitcoin halving event, however, the coronavirus outbreak in China is severely hurting the region’s mining business.
In the last three days since February 5, Bitcoin price has added over $500 to its price taking it closer to $10,000 levels. On Thursday, February 6, BTC price surged above $9800 with nearly 4% gains. Moreover, with this move, Bitcoin’s year-to-date returns for 2020 have reached nearly 40%.
A Twitter handle WhaleAlert spotted Bitcoin whales moving billions of dollars worth BTC on the Bitcoin blockchain network. As per the handle, the whales moved nearly $2.4 billion worth BTC in just five transactions. The total amount of BTC tokens transferred was 248,360 BTC.
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— Whale Alert (@whale_alert) February 6, 2020
Reportedly, two of these transactions took place on a single address on the Bittrex exchange. The first transaction involved the address receiving 45,500 BTC. In the second transaction, the address sent out the same amount of BTC tokens.
Additionally, several industry reports and analysts are predicting that the Bitcoin price will continue to surge ahead as we come closer to the Bitcoin halving event. Recently, the Bitcoin Open Interest (OI) at BitMex exchange touched a new high of $1.5 billion. This massive open interest highlight the size of contracts which the buyers and sellers have opened on the exchange.
Altcoins Contributing to Crypto Market Rally
While Bitcoin has been a dominant force in driving the overall crypto market, this time the altcoins have also shown great movement. In percentage terms, some of the altcoins have surged much more than Bitcoin so far in 2020. Hence, altcoins have significantly extended their contribution instead of entirely relying on Bitcoin to take the market ahead.
For example, Ethreum price has increased by more than 4% within the last 24 hours, The coin is trading at $217 at the moment of writing. XRP price has reached $0.28 (+0.29%).
While the market movement in 2020 suggests a strong trend of optimism, researchers at bitcoin and crypto trading platform SFOX don’t think so. In their latest blog post, they stated:
“While prices appear to be increasing and substantial growth is happening in terms of institutional product offerings and regulatory clarity, there are still significant unknowns hovering over the market at large”.
On the other hand, several geopolitical changes in the market have pushed the Bitcoin prices higher. During early Jan 2020, the escalating tensions between the U.S. and Iran had got the Bitcoin price to surge northwards. Moreover, the latest outbreak of coronavirus in China Bitcoin’s correlation to gold turned positive. So does this mean Bitcoin is slowly positioning itself as a safe haven in uncertain economic conditions? The SFOX analysts said:
“It’s not clear whether bitcoin will function as a safe haven in coming geopolitical turmoil; it’s not clear how much institutional appetite is actually there for all the institutional crypto offerings being launched; and it’s not clear what impact the upcoming bitcoin block reward halving, just four months away, will have on the price of bitcoin”.
Bitcoin Halving Is Around 95 Days Away but Coronavirus Threatens Mining Operations
The Bitcoin community is quite optimistic about the upcoming halving event in May 2020. The Bitcoin halving is a period event every four years which reduces the mining rewards to half.
However, the coronavirus outbreak in China has put a new threat to mining operations in the country. China is one of the most preferred locations for crypto miners due to the availability of surplus and cheap hydroelectric power. The latest virus outbreak is causing miners to shut down their operations to contain the spread.
Since Bitcoin halving is approaching, the miners saw a great demand for mining hardware. But the coronavirus concerns have slowed down the pace of the business impacting the miners operating in this region.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
