5 Reasons BTC Price Is Rising Today

by

Bitcoin experienced a rollercoaster ride in value recently due to volatile cryptocurrency markets, with its price falling 15.98% from its record high of $73,750.07, nearing the danger zone below $60,000. This decline was partly triggered by escalating geopolitical tensions in the Middle East. The impending Bitcoin halving event on April 20, 2024, added to the community’s anxiety as it watched this downward trend with growing concern. Fortunately, Bitcoin’s price has bounced back slightly, and we can now explore the reasons behind its recovery.

Top 5 Reasons BTC Price is Rising Today

Various reasons are behind the current surge of BTC price as discussed next.

1. Upcoming Bitcoin Halving

Tomorrow marks the fourth Bitcoin halving, an event that’s causing excitement and possibly increasing Bitcoin’s value today. Here’s why: During a halving, the reward given to miners for adding new blocks to the Bitcoin blockchain gets cut in half. Consequently, the number of new Bitcoins entering circulation decreases, making the digital currency more scarce and potentially pushing up its price due to increased demand.

Furthermore, past trends show price increases leading up to and following Bitcoin’s halving events, fueling excitement and financial inflows. The anticipation surrounding these events sparks optimistic market feelings and instigates speculative purchasing. For long-term investors, the halving represents a favorable sign for Bitcoin’s worth as a rare commodity.

The media’s focus on Bitcoin continues to generate buzz and draw fresh investment, while miners might adjust their approaches prior to the halving event, influencing market supply and demand.

In simpler terms, the anticipation of less Bitcoin being produced, along with increased enthusiasm for the halving event, could lead to a significant increase in Bitcoin’s price due to the desire for profits among traders and investors.

2. Bitcoin Short Liquidations

Today, Bitcoin’s value has significantly surged, and this growth is largely attributed to a significant change in the Bitcoin futures market. As reported by Coinglass, this event triggered the termination of over $53.27 million in short positions on Bitcoin in just one day, contributing to a total liquidation of around $294.13 million across the cryptocurrency sector.

5 Reasons BTC Price Is Rising Today

Traders who sell Bitcoin in anticipation of its price dropping are hoping for a decrease. But if the unexpected happens and Bitcoin’s price rises instead, these traders face losses. To recover from these losses, they are forced to buy Bitcoin back at a higher price, leading to what’s known as a short squeeze.

With more and more short sellers being compelled to abandon their Bitcoin positions due to mounting losses, the market experiences a surge in buying pressure. Consequently, the price of Bitcoin climbs higher still, fueled by this self-reinforcing cycle.

Ultimately, swift sales of Bitcoin are crucial for boosting demand and pushing up its price even more during a situation referred to as a “short squeeze.” In simpler terms, when investors who have bet against the price of Bitcoin (by selling it without owning it) must buy it back to cover their losses, they drive up the price.

3. Bearish Sentiment Sets the Stage for Bitcoin Price Continued Rise

The pessimistic views of traders and investors towards Bitcoin are another reason for its rising price. According to market analyst Santiment, Bitcoin reached a new high of $63,800 due to excitement surrounding the upcoming halving event. However, despite the market surge, there is still a general negative perception towards major cryptocurrencies, which could further fuel their price increase.

Historically, markets, including Bitcoin and other cryptocurrencies, have often defied popular opinion and experienced uptrends. The tweet hints that the current market situation, the upcoming halving event, and persistent bearish attitudes could result in further price growth.

Cryptocurrency markets have experienced a surge today, with Bitcoin reaching $63,800 once again, only about 36 hours before its halving event. Despite the persistent pessimistic attitude of the crowd towards top cryptocurrencies, this development lends credence to the theory that prices will continue to climb.

— Santiment (@santimentfeed) April 18, 2024

4. Increased Fear and Greed Index

Bitcoin’s price has been affected by the heightened political tension between Iran and Israel, as well as the Federal Reserve’s decision to hold off on reducing interest rates this year. Yet, despite recent price fluctuations, the Fear and Greed Index reads 74, suggesting a growing sense of optimism and faith in the market among traders and investors. This bullish sentiment could lead to further expansion in the Bitcoin market.

5. Accumulation by Bitcoin Holders

Bitcoin holders continue to amass the cryptocurrency, suggesting optimism among investors for future price hikes. A significant transfer of 27,700 BTC, equivalent to $1.72 billion, into storage addresses occurred as Bitcoin dipped below $63,000, implying heightened investor enthusiasm for acquiring Bitcoin in preparation for potential price surges based on CryptoQuant data.

According to CryptoQuant’s findings, an unprecedented amount of Bitcoin, exceeding 25,100 coins, has been transferred to wallets classified as accumulation addresses. These particular wallets do not show any outgoing transactions, possess a balance greater than 10 Bitcoins, and have received more than two inbound transfers. This data indicates that an increased amount of Bitcoin is being moved into long-term storage wallets, signaling growing optimism among investors regarding the asset’s potential value.

Current Bitcoin Price Action

Bitcoin saw a significant surge in value over the past day, gaining 5.20% to reach a new high of $64,891.12. Additionally, Bitcoin’s market capitalization grew by 5.11%, amounting to a staggering $1.27 trillion. The cryptocurrency market has been buzzing with activity, leading to a notable 19.84% increase in Bitcoin’s trading volume, which now stands at an impressive $50.8 billion.

5 Reasons BTC Price Is Rising Today

Conclusion

Today’s rise in Bitcoin’s price can be attributed to several reasons. Firstly, the upcoming halving event is significant as it decreases the number of new Bitcoins being released, making the existing supply more scarce and potentially pushing up prices. Additionally, recent margin calls in the futures market have caused a chain reaction, boosting demand and driving up the cost. Although there have been some price fluctuations, the Fear and Greed Index suggests that investors remain confident about Bitcoin’s future worth, leading to further accumulation. As market conditions develop, these factors combined suggest the possibility of continued growth in Bitcoin and other major cryptocurrencies.

 

Read More

2024-04-19 14:22