Bitcoin, which just last week had its first major sell-off in months, has this morning jumped more than 5%, powering the world's largest cryptocurrency back above $6,500 after it looked likely to fall below the psychological $6,000 late last week.
Bitcoin leapt from $6,222 earlier today to early highs of $6,732, according to CoinDesk data, adding almost $10 billion to bitcoin's market capitalization in a matter of minutes. On some exchanges, including the Bitfinex exchange where bitcoin often trades at a premium, the bitcoin price climbed to over $7,000.
The sudden rise in the bitcoin price this morning was signaled by a sell-off of the dollar-linked tether digital coin — the only cryptocurrency which is down today, according to CoinMarketCap data.
Traders often sell tether to buy other cryptocurrencies and a sudden influx of tether sellers would push down the tether price — and boost the bitcoin price if that's what traders are moving their money to. Tether was down by some 3% in the run up to bitcoin's sudden price rise.
This morning's rise in the bitcoin price all but erase the losses bitcoin recorded late last week, leaving the bitcoin price roughly level since mid-September.
Short, sharp changes in the bitcoin price are often attributed to either trading bots initiating a buy or sell order that then gets picked up by others, causing a domino effect on the price, or by so-called whales (large holders of a cryptocurrency or another asset) buying or selling a big enough chunk at under or above the current market rate.
This causes the market rate of the asset to suddenly move in the direction of the sale, often causing havoc for exchange operators.
Bitcoin's falling price since the beginning of the year (which is down from highs of almost 20,000 at the end of 2017) has been put down to a fall in trading volume since its peak at the end of 2017 — something that has hit cryptocurrency exchanges around the world, prompting some to cut costs and lay off staff.
Elsewhere, some market watchers speculated the rise in the bitcoin price could signal a return to form for the U.S. tech-heavy Nasdaq stock exchange — which last week dropped sharply towards the end of the week.
The U.S. Nasdaq Composite Index last week became the first major U.S. stock market benchmark to dip into a correction, dragged down by losses across all the major technology-related companies.
A correction on Wall Street is defined as down more than 10% from its high.
Online retailer Amazon, streaming service Netflix, and Google parent Alphabet were all in correction territory after taking big hits due to fears around rising interest rates.