The recent price jump up to $440 in less than 48 hours is truly an unexpected event. There is no obvious reason why the market is moving sideways, however there are a few theories that try to explain the current market.
MMM Global Republic of Bitcoin
The first theory is that the MMM Global Republic of Bitcoin is the reason why the price is rising. The ponzi scheme uses Bitcoin in order to facilitate the transfer of funds between one participant to the other. It was led by Sergei Mavrodi, who already started another ponzi scheme also named MMM back in 1989 which was established with the help of his brother Vyacheslav Mavrodi, and Olga Melnikova. The name MMM came from the combining the first letters of the original founders’ last names. Since MMM requires users to purchase bitcoins , some speculate that is the reason for the price increase. The ponzi scheme is truly massive as there are hundreds of videos being uploaded to youtube a day claiming they have received their payment, as the amount of participants increases so does the amount of buy pressure on the markets.
Capital Controls in China
Another theory as to why the bitcoin price is rising is due to Capital Controls in China. It all started with the 2015 stock market crash which happened in June. The government’s response to slow down the crash resulted in regulators limiting the amount of shares investors could sell. It also stopped allowing Initial Public Offerings or IPOs, as a result many Chinese investors turned to bitcoins. No government can regulate the amount of bitcoins a user can sell, because it is a decentralized currency.
Technical Analysis
Edited chart taken from bitcoincharts.com, is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
Some major resistance was broken during this bull run, specifically around $356 and the $400 mark. As long as the $400 support holds, which looks like it is; then we should be heading to one and two year all time highs. Earlier today the price did drop $60 at one time, so the market is highly volatile. There are many arbitrage opportunities if you have funds in exchanges which allow for fast deposit and withdrawals.
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