The reasons for the rise of Bitcoin to record levels over the weekend, according to some analysts
Bitcoin broke all expectations yesterday.
As the price of Bitcoin exceeded $ 30,000 in the early hours of January 2, then surpassed $ 31,000 and $ 32,000 after yesterday afternoon, and reached $ 33,000 early yesterday evening.
Then, soon after, the coin price crossed $ 34,000, reaching an all-time high of $ 34,700.
What are the reasons for this increasing and rapid rise in the price of Bitcoin?
Retail investors:
We're starting to see some retail interest in Bitcoin now and finally.The search for Bitcoin continues to rise, according to "Google Trend" data.It's the first time that interest has soared to this level since the last peak of $ 20,000 that we've seen something like this.
Nimrod Lehavi, CEO and founder of the encrypted payments company, Simplex, agreed to WAL's offering, and he also stated:
There is a rise in demand among retail investors.
Explaining the trend of retail investors, he added:
Retail investors bought only a small portion of Bitcoin's rally this weekend.
Retail investors used to spend 90% of their money on bitcoin.At the end of this week, this has fallen to 50%. Investors are increasingly interested in Tether to maintain their profits and Ethereum.Traders are already looking for the next bitcoin.
Institutional funds:
Institutional investors played the tanks that pushed Bitcoin higher in the fourth quarter of 2020.
And they didn't go away after that.
The hedge fund managed by Anthony Scaramucci is set to open a massive bitcoin fund on Monday.
Meanwhile, Michael Saylor, CEO of MicroStrategy
has no plans to buy more Bitcoin at the moment
Demand from institutional investors helped increase the bitcoin price this weekend.
Where analyst "Joshua is" co-founder of the Singaporean trading company "QCP Capital" believes that the reason for the rise of Bitcoin at the end of this week is due to the continuous institutional interest in all aspects of Bitcoin.
His logic is that institutional investors are very eager to buy bitcoin and they don't care much about the price at the moment.
While Wall believes that the higher prices may be a result of institutional investors withdrawing their funds into long-term storage vaults, reducing the number of bitcoins available to retailers.
A recent report by Glassnode concluded that only 22% of Bitcoin is left to traders, given that institutional investors have already snapped up most of the available bitcoins, fueling demand and further fueling the upside.
Bitcoin continues to rise even on holidays (year end and weekend) despite the institutional investors being in leasing times, Piers Crosby, General Manager of TradingView explained this, by saying:
The higher volume at the start of the year is due to heavy cash Treasuries and asset managers who are rebalancing their books with the start of 2021.
With some deciding to allocate even 1% in crypto, there will be a significant imbalance between buyers versus sellers, in the near term.
The analyst named "HO" believes that today, Monday, things will return and return to normal, but can we see a wave of selling that breaks and corrects this crazy rise in the crypto market?
The whales move:
Ho said a sudden withdrawal of $ 1.15 billion from the Coinbase Pro wallet earlier in the day could lead to trading robots buying bitcoin.
Trading robots quickly place trades when someone moves a large amount of Bitcoin to profit what they see as a bull market.
As for the nature of the purchase, it is not known. "HO" declared about it by saying:
A large outflow likely indicates a significant purchase that has yet to be announced.
What's Next?
Crosby expects the price to continue to jump higher as the volatility at the end of the week is much higher than it was during the week.
This weekend is no different than before.
Correction can be in order.
But how big is the correction, and should it happen?
Wall said:
I will not start to be afraid from now.
Bitcoin still looks like it has a lot to go, such as rising to twice the current value in the first and second quarters of this year.