In past articles for Crush The Street, I noted the lack of explanatory news regarding sharp movements (both up and down) in the bitcoin price. Currently, of course, we’re enjoying a massive bitcoin rally, with the benchmark cryptocurrency soaring above key technical levels. But yet again, we don’t see a reasonable explanation for it.

The typical news cycle rehashes old news, like this “gem” from Forbes. The bitcoin price jumped the way that it did due to a “short squeeze.” Traders recognized the bullish sentiment shift, and were forced to close out their position. This necessarily requires the buyback of borrowed bitcoin tokens that were used to initiate the short position.

I’ll put aside the key issue that the “native” bitcoin market does not have a shorting mechanism. Forbes references the futures market, but this trades in the speculation of the bitcoin price, not the actual, “physical” cryptocurrency. When you strip away the detracting arguments, you’re left with this: the bitcoin rally occurred because of the bitcoin rally.

The question, really, is what caused the short traders to close out their positions?

We can go into the mechanics of the short trade: a trader borrows cryptocurrency tokens, and sells them immediately in the hopes that the market tanks. If it does, he/she can buy back that cryptocurrency at a cheaper price, return the borrowed assets back to the lender, and pocket the difference.

The initiation of the short trade pressures the cryptocurrency market, while the closing out of the position bumps it up. But we’re not asking for a mechanics lesson – we simply want to know why the bitcoin rally occurred, not how. Unfortunately, neither Forbes nor any other publication that I’ve encountered have elucidated what should be a simple concept.

The article does go on to mention that headwinds that previously negatively impacted the bitcoin price, such as the Mt. Gox trustee issue, and rumblings about cryptocurrency or altcoin taxation policies, have faded. Yes, they most certainly have faded, but primarily because these are months old news!

Can you name me one asset class that trades on months old news!?

Like I said earlier, we are left to comfort ourselves that the bitcoin rally has sparked because of the bitcoin rally. Thus, I’m a little bit leery of the price action over the next few weeks. I definitely want to believe that this is the beginning of a decisive turnaround.

But if so, where’s the news? What major catalyst has caused the embattled cryptocurrency and altcoin markets to skyrocket in the past 48 hours?

All I hear is silence, which makes me more than suspicious.