What goes down must come up.
At least, that seems to be the case with bitcoin prices. After recording its lowest figures in the last month during the last couple of days, the cryptocurrency's price has risen by more than 7 percent in the last 24 hours and is poised to touch $6,000, a mark it briefly surpassed at the end of last week. At 13:41 UTC, the price of bitcoin was $5,928.15. Less than two days ago, it had touched a low of $5,382.70.
Other cryptocurrencies, which had touched similar lows following bitcoin’s slide, are also up. With gains of 3.34% and 11.3% respectively, Bitcoin Cash and Bitcoin Connect recorded the highest gains amongst the top 10 cryptocurrencies. Ethereum and Ripple, the second- and third-most traded cryptocurrencies after bitcoin, recorded slight gains. Analysts have posited that bitcoin acts a reserve for liquidity within the cryptocurrency ecosystem. Traders move funds to other cryptos when bitcoin slides, and reverse course when the opposite happens. (See also: Bitcoin Price Continues Downward Trajectory After Bitcoin Gold Launch.)
Reasons for the latest increase in bitcoin’s prices are unclear. Its price declined earlier this week due to uncertainty following a fork that created Bitcoin Gold. While the latest cryptocurrency is still down, bitcoin has gained momentum. Noted investor Peter Thiel came out in favor of the cryptocurrency at a finance summit in Saudi Arabia. According to Thiel, people are underestimating bitcoin's potential. He says bitcoin is a store of value and it has "great potential" as a cyber equivalent of gold.
According to Coindesk, the latest set of bitcoin's prices are an indication that fiat money is entering the market and pushing up prices. The online publication also cites rumors (that were later proven to be false) that e-commerce behemoth Amazon.com Inc. (AMZN) might soon start accepting bitcoins on its site as a possible reason for the rally. "Price action suggests the odds of the upwards move would improve if prices hold above $5,867," the publication writes. (See also: Could Cryptocurrencies Replace Cash?)
That said, the trading volume for bitcoin has increased only marginally, to $1.91 billion. According to TheMerkle.com, a further rise in volume will bode well for the cryptocurrency’s price. “If this number were to climb back above US$2 billion in the coming hours, we may have some more bullish price action on our hands. If not, this may very well be the peak for today,” the online publication writes.