What pushed Bitcoin up?
Investors found themselves in a state of mild elation when Bitcoin suddenly switched to a sharp growth. In a matter of hours, the price spiked 12%. The benchmark cryptocurrency is trading around $38,600 at the beginning of the working week. It is worth noting that trading volumes showed impressive momentum along with the price growth, which further strengthens the current dynamics. Of course, all eyes are now on the important technical and psychological level at $40K. Nevertheless, we should understand that the resistance will only increase as we approach this round value. It is the beginning of a new business week, and now institutional investors should have their say. The crypto market will be very much dependent on the initial reaction of big capital.
Market participants are in search mode for triggers for such sharp dynamics, but there are already reports that a massive liquidation of short positions by almost $900 million could be the reason for the quick growth. In addition, there are unconfirmed rumours (which are likely to remain rumours) about Amazon's readiness to accept payments in cryptocurrency. After Tesla and PayPal, the crypto market players hope that the largest retailer will support Bitcoin. However, in reality, large retailers and tech giants like Apple are simply spooked by the volatility of cryptocurrencies and possible legal complications.
In fact, cryptocurrency holders in developed economies can already enjoy the benefits of digital currencies. Cryptocurrency bank cards linked to a digital currency wallet are available to advanced economies. With these wallets, it is possible to instantly convert from Bitcoin to any digital asset or pay with the first cryptocurrency. So waiting for a direct statement from one of the major retailers is more of psychological nuance. Of course, it would be more profitable and easier to pay with the USDT or Bitcoin directly, but the possibility is already there.
The total capitalization of the crypto market after the Bitcoin surge and the subsequent growth of altcoins has grown by $140 billion. The Crypto Fear & Greed Index for Bitcoin and the largest cryptocurrencies switched to "fear" mode, losing the prefix "extreme". And it would seem that this is the moment enthusiasts have been waiting for, and the bears have been afraid of. Nevertheless, now we should be cautious because the market doesn't play by the majority's rules, and the price around $40K may be attractive for taking profits for those investors who entered the market around $20K. Recent low trading volumes are also watchful, as they point to the ease with which relatively small capital can manipulate by the market.
Author
Alexander Kuptsikevich, a senior market analyst at FxPro, has been with the company since its foundation. From time to time, he gives commentaries on radio and television. He publishes in major economic and socio-political media.
