The price of Bitcoin (BTC) surpassed $19,000 on Nov. 24 for the first time in nearly three years. It followed an XRP flash crash on Coinbase, which trembled the crypto market.
The two incidents could be entirely coincidental. Although considering that BTC price surged almost immediately after the XRP drop, there could be a correlation.
How XRP’s price rally could have triggered Bitcoin to new highs
As Cointelegraph reported on Nov. 24, the price of XRP spiked by nearly 80% in 48 hours. As the rally went on, the hype around the cryptocurrency continued to intensify.
The interest in the cryptocurrency reached a point where it overwhelmed Coinbase, the biggest cryptocurrency exchange in the United States.
Joe Weisenthal, the co-host of What’d You Miss on Bloomberg TV, emphasized that Coinbase was trending on Twitter. The spike in interest around Coinbase occurred when the price of XRP began to increase. He said:
“The cryptocurrency Ripple has gone absolutely berzerk in the last few days. And Coinbase as trending on Twitter right now and if you look it's all people talking about buying it.”
The problem emerged when XRP flash-crashed after hitting $0.90 on Coinbase. It caused the market to undergo extreme volatility in a short span of time. Bitcoin plunged to around $18,000, while ETH dropped to $585.
Although it is difficult to prove conclusively, market trends suggest that the flash crash led algorithms to cause high volatility. The price of Bitcoin briskly rose from $18,000 to above $18,500, eventually breaking $19,000.
When Bitcoin dropped to $18,000 within just minutes, a supply zone was likely tapped. In other words, it might have dropped to an area with significant liquidity, causing many buy orders to get filled.
What happens next?
In the near term, traders and analysts anticipate Bitcoin to continue its uptrend as it nears its all-time high.
A pseudonymous investor known as “Blackbeard” pinpointed the lack of exchange inflows despite the price of BTC reaching $19,000. This indicates that the selling pressure on the dominant cryptocurrency is still relatively low. He said:
“Even though the price of BTC is over 19K USD, there is no unusual number of inflows to detect on the crypto exchanges. This makes me bullish tbh.”
Prior to the breakout above $19,000, another pseudonymous trader known as “Salsa Tekila” predicted the rally. He said that when altcoins cool down, profits would likely move back into BTC. He said:
“BTC been stalling for a couple days, while money pouring in alts. That’s not bearish for BTC. We’re consolidating for a while below the $19K, realistically I believe we’re likely to break the damn level. When? Probably when altcoins cool down and people sell back into bitcoin.”
There is a strong possibility that the trend of profits from altcoins cycling into Bitcoin will continue in the near term. If this happens, the altcoin market would likely stagnate while BTC shows strong momentum.