The price of bitcoin (BTC) goes up like a jig. During the current rally, the bitcoin price today recorded a new all-time high of almost $35,000. Why is everything and everyone suddenly so bullish? In this article we will list a few reasons for you.
The current madness is probably reminiscent of the 2017 rally, but nothing could be further from the truth. This time it is different and we are going to explain why.
Big players see bitcoin
After the worldwide fear of covid-19 in March and the enormous free fall that the bitcoin course went through at that time, everything is now very different. Slowly but surely it became clear last year that big money is flowing towards bitcoin.
Square, PayPal, MicroStrategy, Grayscale, Skybridge and many other serious parties put millions and sometimes even billions into BTC. Every week there seems to be a new big party.
It is inevitable that these big players will cause liquidity on exchanges to dry up. There is simply less and less bitcoin for sale, while demand continues to grow.
BTC moves in predictable cycles
Bitcoin is 12 years old today, but the digital currency has shown the same pattern since its early years. The coin grows to new record highs, then falls back down hard, remains stable for a while, and then the tune starts cheerfully again.
This cycle seems to have everything to do with the halving. Although at the moment there are also people who doubt whether the bitcoin rate will go through this pattern again.
It could just be that the big money makes sure that there is no more big drop. After all, these are not the people who, in the event of a small crash, in panic, sell everything again. On the contrary, they will probably only supplement their positions.
A weak dollar good for bitcoin exchange rate
If there is one thing Covid-19 has done, it is weakened confidence in the dollar. Since the start of the crisis, a huge amount of money has been printed by the Federal Reserve, and the Americans must feel that.
The value of the dollar is declining rapidly, particularly in relation to the bitcoin rate. This, of course, has a self-reinforcing effect. More and more people are seeing the value of BTC rise against the dollar and are all jumping on the lifeboat called bitcoin.
Exactly where we are going next year is hard to say, but it looks promising for us bitcoiners!
Read also: Bitcoin (BTC) breaks the $34,000 barrier! Where is the advance coming from?