Cryptocurrencies just had their best day of the year after a late-night trade triggered a flurry of buying all session.
Bitcoin (BTCUSD) rallied 16 percent on Tuesday, its biggest gain in at least a year. Offshoot Bitcoin Cash (BCHUSD) fared even better, ripping more than 30 percent.
The rally began shortly after after midnight, eastern time. BTC held its ground following the initial surge, while BCH kept blasting higher into the afternoon. Altcoins like Ethereum (ETHUSD) and Litecoin (LTCUSD) also kept climbing in the successive hours.
“That late-night order was like a spark in the tinderbox,” said James Putra, head of product strategy at TradeStation Crypto. “There was a lot of pent-up demand and open short positions.”
“Once BTC started moving, it looks like the bots may have taken over,” he added, referring to automated trading systems.
The rally follows months of basing on the charts. BTC bottomed under $3,200 in December. It then held that important price range, dating back to September 2017, while making incrementally higher lows.
The Fed Factor
“The reason behind the rally seems to be the U.S. Federal Reserve making a major shift toward monetary easing last month,” said Nana Otsuki, chief analyst Monex Group in Tokyo. TradeStation Group is a wholly owned subsidiary of Monex.
Otsuki also attributed the positive sentiment to Japanese regulators approving two cryptocurrency exchanges last week. Both are affiliated with large mainstream companies. Rakuten Wallet belongs to e-commerce Rakuten, the “Amazon of Japan.”
The other, DeCurret, has ties to established financials like Nomura and Mitsubishi UFJ. A third traditional firm, forex company Money Partners, also announced plans to open its own exchange next month.
Headlines like that helped instill confidence that cryptocurrencies may be regaining favor after a year of underperformance and consolidation.
