With its values approaching $24,000 and rising to its highest level since mid-August 2022, Bitcoin, the world’s most well-known digital currency, has recently made headlines.
Bitcoin has increased 3.60 percent in value over the previous day to trade at $23,386.14 as of 2/6/2023.
Investors and traders have become increasingly curious about the surge in Bitcoin prices, with many asking why the value of the cryptocurrency is rising.
What then is causing this increase in the price of Bitcoin? Let’s examine it more closely.
We will examine the many aspects of the surge in Bitcoin prices and the reasons it is grabbing the interest of many sectors of the financial community in this post.
From the Feds to on-chain analysts, the poor and middle class to institutional buyers, and manipulation allegations, we will explore the various perspectives on why Bitcoin is seeing an increase in its prices.
Reasons Behind the Scenes in Recent Price Hike of Bitcoin
The value of Bitcoin has been on the rise in recent months, and it has sparked a lot of interest in the investment world.
As the leading cryptocurrency continues to gain traction, it’s important to understand the factors driving its growth.
Growing Demand Behind the Rise in Bitcoin Prices
One of the main reasons behind the rise in Bitcoin prices, as cited by Feds Jerome Powell, is the growing demand for cryptocurrency.
The increase in the number of buyers compared to sellers is driving up the prices of Bitcoin.
As reported by Seeking Alpha, Bitcoin rose 2.3% to $23.71K at 5:45 p.m.
Limited Supply and Increasing Mining Difficulty
Another reason behind the price increase of Bitcoin is its limited supply.
The fact that the number of Bitcoins is limited and every new coin requires more resources to mine leads to a continuous increase in price.
Like Bitcoin, gold has a strong tendency towards deflation due to its limited supply and increasing mining difficulty, although its rate of increase is much lower.
Influence of the Federal Reserve
The recent interest hike by the Federal Reserve has also been cited as a factor in the price increase of Bitcoin.
Bitcoin rose 2.3% to $23,710 on 2/2/2023, approaching a multi-day resistance level of $23,900.
As reported by many papers, Bitcoin has reacted positively to the rate increase and has seen a climb of 3.60% over the last 24 hours.
And the cryptocurrency has continued to see strong growth, with a 42.4% return since the start of 2023.
Firm Upswing Since the Start of 2023
Bitcoin underwent a narrow consolidation between $16,000 to $17,500 for almost two months before quickly surging close to $21,500.
According to Coinpedia, this firm upswing, which began at the start of 2023, has helped maintain the Bitcoin’s Recent Price Hike.
The Return of Wild Weekends
As Economictimes points out, large price moves in Bitcoin are nothing new, especially on weekends when the cryptocurrency continues to trade 24/7, unlike traditional assets that typically trade Monday through Friday on regulated exchanges.
Exploring Market Analysis and Predictions
Are you curious about the current state of the cryptocurrency market, specifically the rise of Bitcoin prices? Experts, on-chain analysts, and financial gurus have weighed in with their perspectives on the matter.
Multiple Perspectives on the Rise of Bitcoin Prices
An analyst named Kaleo believes that the current price of Bitcoin may be due to the final bear trap.
Although there may be a bearish pullback, Kaleo believes that the price may rebound quickly after a plunge and receive a bullish push to reach levels beyond $24,500 in the coming days.
On-chain analyst Willy Woo also weighed in on the matter, stating that the recent rally in Bitcoin prices is due to large institutions buying the cryptocurrency.
According to CryptoGlobe, Woo took a closer look at Bitcoin’s recent rally that has seen the price of the flagship cryptocurrency rise nearly 40% in January 2023.
Another perspective on why Bitcoin prices are rising is that the poor and middle class in the United States are getting poorer and deeper into debt.
As discussed by Robert Kiyosaki in a recent tweet, this could be why the prices of gold, silver, and Bitcoin are going higher.
As reported by TechStory, Kiyosaki asked why gold, silver, and Bitcoin are going higher and answered his own question by stating that it is because of the poor and middle class in the United States.
Volatility of the Cryptocurrency Market
It is important to note that Bitcoin is incredibly volatile and prone to rising and falling sharply on a daily basis.
The Times reports that global stocks have also had a tumultuous time recently, highlighting the volatility of not just the cryptocurrency market but the financial market as a whole.
Possible Market Manipulation
A recent study cited by Fortune has raised some eyebrows in the world of cryptocurrency as it suggests that a single player may have had a significant impact on the price of Bitcoin.
Whether this individual had exceptional market timing or used other means to manipulate the market is still up in the air.
Nevertheless, allegations of market manipulation in the Bitcoin market persist, with some pointing to market rigging as the reason behind the rise in price.
It seems that the findings of Griffin and Shams from their 2017-2018 study on market rigging are still relevant today.
In conclusion, the rise in Bitcoin prices is a result of various factors, including demand, institutional buying, market conditions, and manipulation allegations.
Despite the various perspectives on why Bitcoin is seeing an increase in its prices, one thing is for sure – the cryptocurrency is attracting attention from investors and traders alike, with many eager to get a piece of the action.
With a market price of $23,900 and an impressive trading volume of $29 billion, Bitcoin holds the top position according to the CoinMarketCap ranking, and its market capitalization stands at $449 billion.