Bitcoin was not immune to April Fools Day jokes.
" It is absurd to believe that this market movement is the result of confusion about the Bitcoin ETF filing, "said Horsley, CEO of Bitwise, who is applying for the first-ever bitcoin ETF." Tho ugh ETFs and April Fools are aktue Well, there are many reasons why this is an unlikely explanation. "
The most likely explanation, he said, is a Reuters report from a private buyer who buys over $ 100 million of bitcoin over a short period of time. Given the small daily trading volume of bitcoin," The order would be enough to influence, "he said.
" Crypto is famous for a long history of volatility like this. It's always hard to pin down the true impulse, and often the real source is not obvious, "Horsely said.
Another rumor was that Berkshire Hathaway, director Warren Buffett – one of the bitcoins most vocal critics – diversified into the asset class. As the founder and CEO of BKCM Brian Kelly, it puts "there is no way" that is why.
A more realistic option is that bitcoin hit an important technical level, he said Kelly poined at a key $ 4,200 price level triggers a stop-loss trade, and in bitcoin and other assets, traders will often set a certain level for when they automatically cover their short term, which may also be a sign that fundamentals are improving and bitcoin runs out of sellers, according to Kelly.
"Everyone who panicked and sold is already out," said Kelly to CNBC Tuesday.
Arca Funds CIO Jeff Dorman, a former trader for Lehman, Merrill , C Itadel said, although buying by trading algorithms kicked off the euphoria, it would have turned quickly if investors were eager to sell. Instead, the bitcoin rally increased to its highest level since November. This particular rally was caused by a "simple" imbalance among more sellers than buyers, he said.
"The big sizes of the cryptic movements make it more interesting for a story, but it's not so different from any other asset class," said dorman. "Buyers outweighed sellers, and market makers felt the pressure to take their markets higher, triggering stop losses and liquidation, which increased buying pressure."
Bitcoin prices have seen a relatively quiet 2019 after a year of volatility. Cryptocurrency dropped about 75 percent last year after climbing to a high of nearly $ 20,000 at the end of 2017. It has not yet recovered anywhere near high it since and traded almost $ 4,728 on Tuesday afternoon.
But still Dorman said some investors might be looking to get back in.
"The fact that every little dip is bought immediately in the last few weeks shows that investors are not afraid of sales, they hope for them to buy more," he said. "This certainly raises the long-term floor, but this feeling can also change in a dime."