Bitcoin rises 20 percent, mystery buyer is set as a catalyst by Reuters

By Tom Wilson and Tommy Wilkes

LONDON (Reuters) – burst to its highest level for almost five months On Tuesday, smaller crypto carts sent out, with analysts attribute the move to a large order by an anonymous buyer who triggered a crazy computer-driven deal.

The original and largest crypto competition increased as much as 20 percent in Asian trade, exceeding $ 5,000 for the first time since mid-November. By late in the morning, it had settled around $ 4,700, still up 1[ads1]5 percent in its biggest one-time gain since April last year.

Bitcoin increased to nearly $ 20,000 by the end of 2017, the top of a bubble driven by retailers who pushed cryptocurrencies on the agenda of regular financial firms. But broad interest went down as prices collapsed, and now trading is mainly done by smaller hedge funds, tech firms and wealthy people.

Oliver von Landsberg-Sadie, CEO of London-based CryptoCurrency Company BCB Group, said the move was likely triggered by an algorithmic order worth around $ 100 million spread across major exchanges – US based Coinbase and Kraken and Luxembourg based Bitstamp.

"There has been a single order that has been algorithmically ruled across these three arenas, around 20,000 BTCs," he said.

"If you look at the volumes of each of these three exchanges – it was in concert, synchronized, volume volumes of around 7000 BTC for one hour".

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Analysts could not point to any specific news or developments in the cryptography sector that could explain mystery buyers' big orders.

Outsized price movements of the type rarely seen in traditional markets are common in cryptographic markets, where liquidity is thin and prices are highly opaque.

So big orders tend to spark buying from algorithmic traders, says Charlie Hayter, founder of the industry website CryptoCompare.

As bitcoin increased, there were 6 million trades over an hour, Hayter said three to four times the usual amount, with orders concentrated on Asian-based exchanges.

"You trigger other order books to play catch up, and it creates a bought frenzy."

Bitcoins surge sent smaller cryptographic courses, known as "altcoins", higher trade. Ethereum's ether and Ripples, respectively, the second largest and third largest coin, both jumped over 10 percent.

Price movements of smaller coins tend to be correlated with bitcoin, which still accounts for just over half the value of the crypto market.

"Usually bitcoin is the market leader and altcoins tend to follow, both in terms of direction and mood," said Mati Greenspan, an eToro analyst in Israel. "Today bitcoin is in the driver's seat."

The markets for cryptocurrency have been relatively quiet so far this year, with bitcoin trading to today ranging from around $ 3,300 to $ 4,200.

There have been few catalysts for large price movements of the type seen last year. In 2018, fears of regulatory clampdowns and declining interest from private investors had a bitcoin decline of about three-quarters.