Gate – In Bitcoin, the premiere decentralized digital currency, the pessimistic bears are not going to budge as the bulls try to break through the $21,480 resistance and try to cancel the losses of FTX.
Source: shutterstock
The price of Bitcoin can be affected by a variety of factors, including market sentiment, regulatory developments, investment demand and global economic conditions.
Understanding these factors can help you understand why the price of Bitcoin fluctuates.
In this article, we will take a closer look at some of the potential reasons behind the current changes in Bitcoin price today.
Whether you are a seasoned investor or just starting to explore this new and exciting asset class, this article will provide you with valuable insights and information to help you make informed investment decisions.
Why is bitcoin rising this month?
organizational developments
Changes in laws or regulations related to cryptocurrencies can also affect the price of Bitcoin. For example, if a government announces plans to block cryptocurrency trading, the price of Bitcoin may fall. Likewise, if a country were to introduce regulations that make it easier for people to buy and sell bitcoin, it could increase demand for the digital currency and increase its price.
According to market analysts, the long-term outlook for Bitcoin is positive. In addition, investors may have more confidence in the cryptocurrency market as they expect the Federal Reserve to gradually increase interest rates in 2023, as indicated in the Consumer Price Index report.
Low interest rates could fuel the cryptocurrency market recovery
Source: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
According to the CME Group, which offers derivatives and monitors interest rates, interest rate hikes are likely to be lower than expected in the near term. This is supported by a chart showing a slowdown in interest rate hikes. Many investors are confident that future rates could drop, which could lead to a revival in the cryptocurrency market in general.
A falling US dollar is a positive sign for Bitcoin
Source: TradingView
Another positive sign for Bitcoin is the drop in the US Dollar Index (DXY). Historically, when DXY declines, appetite for riskier assets like Bitcoin increases. As the dollar weakens, it makes Bitcoin and other cryptocurrencies more attractive to investors, which can help push up the price of Bitcoin.
investment demand
Bitcoin price can be affected by changes in investment demand. When more investors buy bitcoin, the price tends to go up. For example, if a large institutional investor announces plans to buy a large amount of bitcoin, this can drive up the price. On the other hand, if more investors sell, the price tends to fall.
2017 And 2022 Bitcoin RSI Values support point + break point + and the point where it is now are almost the same.
After Fibonacci 0.816, target Fibonacci 0.382
Have a nice day, let’s see and see#Btc #Bitcoin #Crypto pic.twitter.com/eEIwbENbOK
– Crypto Sahin (@KriptoSahintas) January 18, 2023
“With a sharp 23.3 percent increase to start the year, a broad cross section of bitcoin investors (and miners) have seen their net holdings (and transactions) return to profit,” he said. This reflects both the impact of strong price growth and the large volume of coins in circulation in recent months that have resulted in a return to low cost levels:
economic conditions
Bitcoin price can also be affected by global economic conditions. For example, if there is a lot of uncertainty or instability in the global economy, investors may turn to bitcoin as a safe haven. This can lead to an increase in the price of Bitcoin. Conversely, if the global economy is stable and growing, investors may be less interested in btc as a safe haven and the price may fall.
Source: alternative.me
Sentiment swings regarding BTC price strength can be quite significant depending on the fear and greed index. It should be noted that the cryptocurrency market has spent most of 2022 in the low “extreme fear” category.
Difficulty reaches a new peak
If bitcoin’s rally wasn’t enough to excite investors, the network’s fundamentals also provide a positive outlook.
Source: Cointelegraph
Mining difficulty across the network saw its biggest jump since October 2022, rising nearly 10 percent during the weekly close.
Supply and demand
The main reason for price changes is that if the demand for a product exceeds the supply, the price will rise and vice versa. For example, if there is a sudden increase in demand for bitcoin, but the supply is limited, the price will go up. Conversely, if the demand for btc suddenly drops, but the supply is unlimited, the price will fall.
Again, it should be noted that the cryptocurrency market is very volatile and the price of btc can change rapidly. These are just a few of the potential factors that can affect price, but it’s always a good idea to do your own research and consult with a financial advisor before making any investment decisions.