April 15 served as a milestone of sorts for the price of bitcoin, with the cryptocurrency touching the milestone of $500 apiece once again. The price jump, most likely spurred by the waning of fears that China was to aggressively restrict or outright ban its citizens from trading BTC, represents both a return to volatile form and a reversal of a steady price decline that had been occurring for the last two months.
BTC hit a five-month low last week, briefly touching $380 after investors began to fear a Chinese lockdown on the currency. While China’s official position has long been that its denizens can trade BTC at their own risk, crypto investors worldwide have long feared that the country’s tightly controlled financial sector could clamp down even further without notice and possibly force Chinese bitcoin holders to liquidate.
While it’s impossible to know the exact geographic location of all of bitcoin’s holders thanks to the anonymous nature of bitcoin wallets, bitcoin trading volume on exchanges is easier to parse. With news on April 11 that volume at BTC China was down nearly 80 percent, investors abroad went into panic selling, sending the currency’s price south at a rapid clip.
The price rebound this week has two implications, from a speculative perspective. One, it serves as a refutation that bitcoin’s 2014 springtime decline represented the “capitulation” phase of the classic bubble cycle; and two, it served as a refutation that bitcoin has entered a stability period. The currency is back to its volatile ways, sending daytraders on a wild ride reminciscent of the December-January 2014 whipsaw action.
To be sure, an investor bearosh on bitcoin could argue that this upswing is merely a 'bull trap' before the final meltdown. But for the time being, bitcoin has once again avoided a monumental price collapse with yet another re-injection of capital.
As of 2 PM EST BTC was trading at $494.23 a coin after breifly touching the $500 milestone. BTC is up over 30 percent from its 2014 low hit on April 11. However, it is still down 36 percent on the year.