Bitcoin holders took a sigh of relief after the asset topped $25k showing signs of correction after a multi-month descending line. The asset has been trading between $ 22,000 and $ 23,000 for more than a month. On Saturday evening, BTC managed to jump from $24k to $25k. The sudden uptick in value could mean a consolidation phase for the asset.
The BTC momentarily Price Jump
Bitcoin briefly jumped to $25,000 over the weekend. On hourly trading charts, the asset attempted to surpass the $25k mark but fell back to $24k. Bitcoin’s volumes were affected by the sudden rise and fall making the asset appear even more volatile.
BTC has continued to show signs of recovery majorly due to the uptrend records being developed with ETH’s Merge coming closer. Many influential crypto investors are eyeing on another such uptick event for Bitcoin.
The Bitcoin bear market
After the Terra – LUNA collapse followed by the crypto meltdown, even top crypto tokens like Ethereum and Bitcoin were impacted. Bitcoin’s steep decline in value from $30,000 to $21,000 was caused due to a mix of reasons like crude oil price hike, high inflation rates, decrease in cash flow to list a few. The increase in 75 interest basis points by the US Federal impacted the entire crypto market.
Deribit – an exchange for Open Interest Options recorded $5.7 billion Ether Open Options which is 32% higher than Bitcoin options at $ 4.3 billion on August 1, 2022. The Open interest options refer to the number of active derivative contracts, or the options opened by traders but not closed or expired. Besides the increase in interest rates, the high inflation rates and Consumer Price Index reports were not in favor of the crypto market.
Crypto analysts also believe that the Ethereum Merge could possibly make (ETH) Ethereum take over the number one crypto (BTC) Bitcoin (By market cap).
Bitcoin’s Surge – what could be the reason for BTC’s sudden sharp rise?
Ethereum was up by 2.3% its highest since June, 2022 whie Bitcoin was up by 2.2%. Some believe that the most anticipated event of Ethereum ‘ The Merge’ which will transform the chain from Proof of Work to a Proof of Stake protocol has been impacting the value of ETH and BTC as well.
Experts believe that the BlackRock Bitcoin Fund could be the driving force for the asset’s sudden price rise. On August 11, 2022, the fund manager of BlackRock announced the launch of a private trust offering BTC exposure to its institutional clients in the U.S. BlackRock agreed to link its Aladdin Investment Platform to Coinbase.
The firm connects the fund management industry with insurers, banks and asset managers. The new venture by BlackRock might potentially offer tough competition to Grayscale – the world’s largest crypto investment platform. With the new private Bitcoin spot trust fund institutional investors of Bitcoin will be able to receive direct exposure of the asset restricted to clients in the US only.
Bitcoin did hit the $25k mark for a brief moment over the weekend and retracted to its long term value. According to the MACD range recorded during the weekend, the value of BTC could remain at $23,000 for some time. Some traders believe to see an upswing like this again. In addition to these analytical observations, one could foresee a radical price change depending on the change in inflation rates.
Source: Financial Times, CoinDesk