(Bloomberg) -- Bitcoin dropped then spiked and dropped again in Wednesday morning trading. The pattern looked familiar to fans of America's favorite lemon-toned television family.
“We joked about it -- it was the Bart Simpson pattern where it jumps up like this and spikes around a little bit like Bart Simpson's head,” said Justin Litchfield, chief technology officer at ProChain Capital, referring to the fictional son of Homer and Marge Simpson in one of the longest-running sitcoms on television, Fox's “The Simpsons.” “It's been doing that a lot lately with these really sharp spikes.”
Cryptocurrencies are infamously volatile, at times posting double-digit gains and losing just as much moments later. In April, for instance, the largest cryptocurrency jumped 21% on the back of an internet hoax. In May, peak excitement over Bitcoin pushed its price up 17% in one session, just days after a flash crash. A similar pattern played out again in August when Bitcoin suddenly dropped for no apparent reason, leaving traders and speculators guessing about catalysts behind the move.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Wednesday's move, which saw Bitcoin gain as much as 6% before paring losses, may have been caused by a large Tether deposit on an exchange, said Danny Kim, head of growth at SFOX. “Given this data is publicly available, other market participants could have been expecting there would be a big purchase coming and tried to get ahead of the run, thus creating a short-term price increase,” he said.
Bitcoin was up 2% as of 12:46 p.m. in New York to trade around $7,479. The Bloomberg Galaxy Crypto Index, which tracks some of the largest digital tokens, gained as much as 4.1%.
To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Randall Jensen
©2019 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
