What happens with Bitcoin – shorts close or the beginning of a recovery rally?

Yesterday Bitcoin experienced a large upward impulse, which returned the digital currency back to life. Literally, for one hour, the market has gained by more than 17 percent. Price rebounded from the $6,630 mark (the zone of the new local bottom) and rose to $8,030. It is true that it did not succeed to gain a foothold above this mark-there was a partial fixation of profits and the market pulled back into the $7,700 zone.

Today, after some hitching immediately under the resistance $7,740, the market growth continued and close to the start of US trading session bitcoin trades around $8,147 zone.

What happened to the market? There is still no information about who made such a large-scale buying. From bitcoin blockchain sources it became known that yesterday in the course of an hour more than 38,500 coins were traded, which contributed to an increase in the price of more than 1000 US dollars.

Further, the option of large-scale shorts close cannot be excluded , which led to even more liquidation of short positions, since traders with open short positions began to suffer losses. This can lead to the emergence of large-scale local pullback or even to a reversal, since even a local price gain will lead to even greater longs.

The first four months of 2018 were not easy for bitcoin and cryptocurrencies in general, and for bitcoin, more than half of its market capitalization was lost in the first quarter.

Traders expected the return of a positive mood to the markets in mid-April, as soon as the tax period in the US is over. However, the denouement on the market happened earlier.

We can only wait a little to understand what caused the current upward impulse. Is it a return of global demand, or is it just a massive shorts liquidation and profit taking with local rally.

FortFS