The reasons why Bitcoin set a new high of 34 thousand dollars

Over the past few days, Bitcoin has surpassed the expectations of even the most optimistic cryptocurrency holders. BTC easily overcame the barrier in the region of $ 30 thousand and rushed to a new historical record in value – now the peak is located at $ 34,684.

In addition, the second cryptocurrency in terms of capitalization, Ethereum, was able to grow above $ 1,100. Why did this happen with BTC?

So far, the market is «cooling down» a little after the rapid breakthrough of Bitcoin and Ether, which means it’s time to talk about the next stage of bull run. The journalists of the news edition Decrypt have collected the most interesting opinions of cryptanalysts regarding the recent rise in the price of digital assets.

We checked the actual data: this morning, Bitcoin is trading in the zone of $ 31,221, which is 3.8 percent below its value a day ago. At the same time, the minimum rate per day is $ 28,273, that is, BTC managed to collapse in price by $ 5,000. The fall was sharp – as was the recovery. Here is a graph of the course of the first cryptocurrency for the last 24 hours.

Individual investor behavior

According to Eric Wall, CIO of cryptocurrency fund Arcane Assets, a new wave of interest in Bitcoin and the crypto market in general is starting to awaken among hobby investors. Here is his remark, in which the expert shares his opinion on the situation.

We are finally starting to see some interest in bitcoin. For the first time since the last peak of $ 20,000, we have seen something like this.

That is, according to him, retail investors are gradually starting to connect to the current rally, who, among other things, pushed the BTC rate to a record then 20 thousand in 2017.

The CEO of the payment company Simplex, Nimrod Lehavi, expressed a similar opinion: he also noted the interest in crypto from people who are still far from the digital asset industry. But beyond that, hobbyist investors have embarked on a quest for a «new Bitcoin» – an asset that could show sky-high profitability in 2021. And, according to many, Ethereum will become such an asset. ETH is trading at $ 1,015 this morning.

The cryptocurrency recently crossed the $ 1000 mark and now only a few hundred dollars are left before the new all-time high of ETH.

Institutional money and cryptocurrencies

Institutional investors are the tanks that pushed the price of Bitcoin higher in the last quarter of 2020. And they have not gone anywhere. For example, the hedge fund of former White House communications director Anthony Scaramucci is about to open a huge crypto fund, and MicroStrategy CEO Michael Sailor is not slowing down his appetite for acquiring more and more BTC. He also actively promotes cryptocurrency on his own Twitter, which is now followed by 302 thousand people.

Joshua Ho, founder and partner at Singapore-based trading company QCP Capital, explains this weekend’s bull run by «ongoing institutional interest from all quarters.» Its logic is that institutional investors are so eager to buy up bitcoins that their pressure on the market drives up the price.

A recent report from analysts at Glassnode concluded that traders only have 22 percent of free bitcoins left, as institutional investors have already bought most of the available volume of cryptocurrency, which has led to an increase in demand and further fuels the bullish trend.

Trouble among bots in the cryptocurrency market

Those market players who are engaged in algorithmic trading – that is, they use automated algorithms to open trades – have become a catalyst for local hype in trading. Ho said the sudden withdrawal of $ 1.15 billion from the Coinbase Pro wallet last week could have prompted trading bots to actively buy bitcoins. As a reminder, trading bots often make deals when someone is moving a large amount of coins. Here is an expert quote.

The large churn from the exchange likely indicates a large cryptocurrency purchase that has yet to be announced.

But according to Wall, Coinbase’s cash flows do not reflect big whale deals. He believes that this is just a routine movement of funds between the wallets of the trading platform. One way or another, what happened «infuriated» the bots and rocked the market.

What will happen to Bitcoin

One thing is clear – bullrun is not going to seriously slow down yet. In an interview with Decrypt, Wall said that the main cryptocurrency could easily double in value in the first or second quarters of 2021. Here is his point of view.

I would not start to be afraid of the market correction yet, it still seems to me that there is still a lot of things ahead. Bitcoin’s doubling from now on in Q1 and Q2 is entirely possible.

We believe that there is no point in counting on someone’s predictions, but the market really looks positive. Judging by the growth rates of top cryptocurrencies in recent years, the industry has really moved into the stage of confident bull run, and this is only its initial stage. We hope that it will be more interesting further, and officials and other ill-wishers will not be able to break this trend.

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