Bitcoin mooning: Why is the price going up?

What does ‘mooning’ mean?

‘Mooning’ is a term used by crypto enthusiasts to refer to the continuous growth in the price of cryptocurrencies. It derives from the phrase ‘going to the moon’ that occurs when a cryptocurrency’s price skyrockets so high, it goes off the charts. For mooning to happen, the rise in price should be rapid and sharp over a period of time. Visually, the chart should show a steady upward trend. 

Aside from using it to describe how the chart looks, ‘mooning’ is also used when predicting the movement of the market price. It’s an optimistic term that holds positive sentiment on how the chart will move in the coming days. When using the phrase ‘to the moon’, people refer to a strong belief that a certain coin’s price will significantly rise or continue to do so.

Uses of ‘mooning’

‘Mooning’ and ‘going to the moon’ are some of the most widely used terms in the crypto community alongside ‘Hold On To Dear Life’ (HODL). While people usually use it when predicting the price’s movement, some also use it to hype people up and convince others to buy a coin that’s about to ‘moon’.

Mooning first occurred to Bitcoin in 2017 when its price breached the US$20,000 mark. In the first quarter of 2019, Bitcoin’s price went to the moon again, and now in 2020, the chart is showing telltale signs of a bullish run.

What causes Bitcoin mooning? How does it happen?

To know the reason behind this phenomenon, we have to learn what causes Bitcoin’s price to rise in the first place.

Typically, the main reason behind an upward trend is due to many people buying and storing Bitcoin. Unlike traditional markets, the movement of the crypto market highly depends on the volume of coins out there. 

If a significant volume of Bitcoin is bought, the price appreciates. If a large volume of coins is sold, the price depreciates. So if there’s a consistent buying of huge volumes of Bitcoin happening in the market, it’s inevitable that the chart will climb higher every day. The more mainstream Bitcoin becomes, the more people will buy and participate in the market. That is always considered a positive phenomenon for cryptocurrencies.

However, Bitcoin’s dependability on buyers also has a negative effect. This means that if more people are selling Bitcoin rather than buying them, then the price will drop as well. The crypto market’s volatility is often judged as the weakest point of the industry, which is why people are always on the lookout for other coins that are about to moon. 

When has Bitcoin ‘mooned’ before?

The first Bitcoin mooning in 2017

Bitcoin mooned for the first time in December 2017 when it climbed to nearly US$20,000 –  the highest it has ever been. This was also the highest price a crypto coin has ever reached. In the following year, Bitcoin’s price slowly climbed down. By December, it dropped as low as US$4,000, which made 2018 known as the year of the cryptocurrency crash.

Following this crash, however, was Bitcoin’s second mooning in 2019. When the year started, Bitcoin wasn’t looking good as it dipped to its lowest US$3,000. But in just a few months, the community was abuzz with a bullish sentiment after the coin’s price continuously climbed. 

The second Bitcoin mooning in 2019

By the third quarter of 2019, Bitcoin’s price showed positive signs of a bullish run. From US$3,000 in February, it steadily rose to US$12,000 in July. The reason behind this upward trend proved to be institutional investors dipping their hands in the crypto market. 

Institutional investors consist of wealthy family offices that compose of high net worth individuals. Their sizable investments jumpstarted Bitcoin’s second mooning that prevented Bitcoin’s downward trend in the first months of the year to continue. 

In the third quarter of 2019, Bitcoin rose above the US$11,000 mark. Another factor that contributed to Bitcoin’s second mooning is Facebook’s announcement of their own digital coin, Libra. This prompted mainstream interest in Bitcoin and other cryptocurrencies. With Facebook’s wide reach to billions of users, more people learned about the crypto market which led to more investors buying their first Bitcoin.

Positive investor sentiment also played an important part in influencing a lot of people into buying Bitcoin. It drives public interest and creates a strong momentum that contributes to the appreciation of Bitcoin’s price.

Why Bitcoin is mooning again in 2020

Bitcoin is mimicking its performance last year, but this time, it’s even better. By the end of the year’s first quarter, Bitcoin dipped alongside traditional markets due to the coronavirus situation. In March 2020, it went as low as US$4,000, which was then dubbed as the ‘Black Thursday’ event.

Fortunately, this has been Bitcoin’s lowest price since the year started. After the Black Thursday event, Bitcoin’s price started rising again. This was largely attributed to the price appreciation that often happens before bitcoin halving. Bitcoin’s block reward was scheduled to be halved in May 2020. 

Bitcoin halving is an auspicious event meant to reduce inflation and cause a positive long-term effect on Bitcoin’s price. Due to the halving craze, more people were buying Bitcoin, which in turn, positively affected the coin’s price.

Bitcoin continued rising even after the halving happened in May. By the third quarter, its price breached the US$10,000 mark and even went as high as US$12,000 in August 2020. For the entire month, it remained in the US$11,000 territory and at times, went past US$12,000.

In the first week of September, Bitcoin’s price dipped back to US$10,000, but US-based cryptocurrency exchange Kraken reports that September has historically been a bad month for Bitcoin. During this month, the average return dips to the negative side. 

Fortunately, Kraken says this isn’t the end of Bitcoin’s bullish run. Instead, the temporary dip will only fuel an aggressive return in the last months of the year. 

2020 Bitcoin mooning is only beginning

Bitcoin’s bullish run can be attributed to people looking for alternative investments other than fiat currencies. In these uncertain times where governments are putting nations on lockdown, economies are in recession and unemployment rates are at an all-time high, people are looking for investments that will keep them secure in the future. With how things are looking right now, perhaps this could be the start of Bitcoin’s third mooning.

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