Bitcoin jumped suddenly on Tuesday, following months of relatively low volatility in an asset once known for its wild price swings.
The reason for the sudden price jump wasn’t immediately clear. Other virtual currencies were also higher, with ether and XRP both rising around 6 percent.
Experts attributed the price hike to a breakout from a closely-watched resistance level of $4,200. Bitcoin had been hovering around the $4,000 mark for several months.
“Bitcoin’s break above $4,200 this morning was critical, as the market had been watching that level for a while,” Mati Greenspan, senior market analyst at trading platform eToro, told CNBC. “No doubt some entry orders and stop losses were grouped right above.” Meaning that certain algorithmic trades had kicked in after it reached this higher level.
It comes after a massive slump for the cryptocurrency market last year. Bitcoin fell over 76 percent in 2018, and is still well below an all-time high near $20,000 it notched in December 2017.
“Bitcoin has been trading range bound for a while now and shaking off some of the negative sentiment that it accrued in 2018,” Charles Hayter, chief executive of digital currency comparison firm CryptoCompare, told CNBC.
“This trigger was through volume-led price action driving the price and triggering algos on a breakout.”