Why is Bitcoin Rising Again?

After experiencing a sharp fall a few days ago, Bitcoin has risen again.

According to Coindesk analysis, BTC fell from $11,500 to around $12,700 within a day. The price then began to rebound and has now reached around $13,300.

Based on Tradingview data, there are three main reasons for the recent surge: first, the market has seen a new round of rising trends, with Bitcoin breaking the $14,000 mark again; second, global investors, especially in the US, are increasingly interested in digital currencies; third, institutions are buying more Bitcoin.

With Bitcoin reaching its highest market value since 2018, many investors are paying attention to this emerging asset class. For example, MicroStrategy CEO Michael Saylor stated, “We now have the most liquid cryptocurrency in the world.”

Furthermore, some analysts have mentioned that “Bitcoin may soon become the next Bitcoin, just like many other altcoins.”

However, it is worth noting that this is just the beginning. In November of last year, Bitcoin first entered mainstream view and reached a new all-time high at the end of 2020. Since February of this year, Bitcoin has been in a sideways consolidation until the end of April. But in May, Bitcoin finally recovered and reached a high of nearly $20,000 in early June. (Cointelegraph)

Why is Bitcoin Rising Again?

After breaking through $10,000 last night, Bitcoin rose again. Looking at the current trend from a one-hour perspective, the Bollinger Bands are closing; on the five-minute chart, the price has retraced near the upper Bollinger Band; and the MACD indicator shows a divergence, with both bulls and bears showing strong resistance. Overall, based on analysis, today’s market will follow the rebound of the overall market. However, not many people know why it will continue like this, but as we have mentioned before: in a bull market, there will always be a certain degree of psychological change among investors and resulting investment decisions that occur. So now is the time to make money.

But if you don’t know, today is the weekend, and tomorrow is Monday morning. We need to ask two questions.

First, what is the reason for the recent Bitcoin crash? Second, what changes have occurred in the cryptocurrency market this year? Third, what is the reason for this Bitcoin rally?

The first reason is that the recent decline did not bring in more capital inflows, but many newcomers entered the market (of course, these are all old participants), which means that many people are starting to pay attention to this market (as they did in December last year). So this is good news for Bitcoin because the previous crash indeed left many retail investors unable to participate. Therefore, I personally think this is a normal phenomenon. In addition, there are still many institutional investors on the market who are enthusiastic about investing in digital assets, especially large fund companies like Grayscale, who are buying Bitcoin. Moreover, in the case of large fluctuations in Bitcoin prices, they may invest their idle cash into digital gold and purchase some Bitcoin in order to achieve greater returns. (Image source: Bitpush News)

Another major factor is the booming Bitcoin mining industry:

First, the hash rate on the Bitcoin network continues to increase.

Second, more and more mining machine manufacturers are delivering new chips, equipment, and ASIC products.

Lastly, US-listed company MicroStrategy has once again purchased $1.5 billion worth of BTC as collateral. Therefore, this claim makes sense. However, as the market grows, Bitcoin is expected to continue to have a certain upward potential, possibly reaching billions…unless there is a sudden event that causes people to worry, leading to a “forced selling” behavior.

The third reason is that as the price of Bitcoin continues to climb and its supply decreases, the price of Bitcoin can be disregarded, just like on March 12, 2017. On March 11, 2017, the first publicly traded company in the world, MicroStrategy, purchased $1.3 billion worth of Bitcoin. Subsequently, MicroStrategy quickly sold off all of its holdings and transferred them to a US-listed company, a major shareholder of MicroStrategy. Michael Saylor, the CEO of MicroStrategy, once stated…