Bitcoin (BTC) just shot up today to breach the $45K line, which it lost on January 12 this year. What could be the reason behind the current uptick in the digital asset’s price?
Bitcoin Recovers the $45K Range
As of 4:30 PM UTC, Bitcoin suddenly spiked by more than 5% to $45,300 in the 24-hour chart. This was coupled with an 86% increase in trading volume as $28.72 billion worth of BTC moved between wallets and exchanges. During this time, the prices hovered between a $43,000 low and a $45,440 high.
The surge led to the overall valuation of Bitcoin’s 19.62 million circulating supply to $888.97 billion, which in turn brought its volume/market cap ratio at 3.21%. Zooming the chart to the seven-day run of the coin shows a 6.5% gain but the monthly chart only got a 0.5% nudge on the upside. But then again, compressing the numbers within a yearly frame displays a whopping 98% recovery for the crypto asset.
So far, the premier crypto by market cap is still 34% away from regaining the price it lost from its all-time high of $68,789 per BTC back in November 2021. However, many signs and important events in the financial world may eventually lead it there, and many analysts think that Bitcoin may even surpass those numbers.
The primary cause of Bitcoin’s sudden rally to the $45K range is the waning confidence of investors in the capacity of US banks to sustain themselves according to CNBC. This FUD over the banking sector was reinforced by the dipping shares of the New York Community Bancorp (NYCB) on Thursday.
The source observed that this has been the trend since the regional banking crisis last year. Turmoil in the banking and traditional finance (TradFi) sectors seemed to work in favor of Bitcoin as of late.
Another factor is the rising optimism of investors in Bitcoin itself. Whales, or those with at least 1,000 BTC in their wallet, have been noticeably hoarding more of the supply in the past two weeks. One of them happened to be the analytics firm MicroStrategy, which has now grown its stash to 190,000 BTC or approximately $8.55 billion at present rates.
“What’s happening now appears to be large investors — whales, institutions, others — accumulating assets ahead of what many believe will be a strong bull cycle through the end of the year,” said Cube.Exchange CEO Bartosz Lipiński in an interview. “One only needs to look at the number of Bitcoin wallets holding more than 1,000 BTC, which has risen significantly over the last two weeks and now includes an additional 73 participants that previously weren’t holding such a significant amount of the cryptocurrency.”
Let’s add to these the looming federal meltdown ominously hinted by the information spewed by US Federal Reserve Chair Jerome Powell during an interview with CBS’ 60 Minutes wherein he admitted that the country may be heading toward an “unsustainable fiscal path.” This unfortunately jived with the bleak outlooks of experts like veteran investor Jim Rogers and JPMorgan CEO Jamie Dimon.
All these are happening in the background as the Bitcoin halving nears, which should further tighten BTC supply amid the rising demand of institutional players for the digital asset.
So, better strap on your seatbelts folks! The following months could be a bumpy ride to the top!