Previously, There Has Been Resistance:
Bitcoin has seen a wide range of peaks and troughs during its life. It hit a height of about $1.1 million in February of this year. At this stage, Bitcoin encountered a powerful revolt and was unable to overcome it. Bitcoin would almost definitely have begun a bull run if it had burst through the opposition in June. Sadly, it failed to do just that for bitcoin bulls, and the price fell to nearly $3,800. Brexit Millionaire will help you find more information on it.
Throughout October, Bitcoin retested the resistance level, only to fall. On November 4th, Bitcoin went through $1.1 million and had been steadily growing since then. This is notable since the next significant support level for Bitcoin is its previous all-time high of $20,000, a considerable degree of resistance. With Bitcoin no longer having a possible resistance barrier until its last all-time high of $20,000, some investors believe the Cryptocurrency would be allowed and retest and even crack beyond that level. As a consequence of the uncertainty, the price of Currency has risen.
Inflation and the Desperate Search for Safe-Haven Assets:
Another aspect behind Bitcoin’s rise is the increasing appreciation of the US dollar. Even though inflation only targets 2% per year, recent government spending is on pace to dramatically increase inflation or erode the dollar’s purchasing power. As a result of new spending packages, the U.s. public has added $2.4 trillion to the economy. Many citizens are afraid that the dollar’s purchasing ability would erode and that prices would rise as a consequence.
Many citizens have abandoned the dollar to shield themselves against rising inflation, preferring to invest in Currency that has historically held or even increased in value. To avoid shortages or competitive prices, people usually invest their dollars in unavailable goods or less costly in general. These ‘safe-haven portfolios include precious metals, securities from low-volatility sectors, and, most recently, Bitcoin.
Adoption as a Method of Payment:
Another reason for Bitcoin’s price rise is the increasing popularity of Currency as a payment method. PayPal (PYPL) recently announced that its buyers and merchants would be able to buy, offer, hold, and accept digital currency as a form of payment shortly.
As a consequence of this news, the bitcoin price immediately increased. Customers with PayPal’s approximately 350 million accounts will soon be able to buy, shop, and use Bitcoin with ease. Upwards of 20 million retailers have now signed up to accept PayPal as a payment method. This has far-reaching ramifications that aren’t exclusive to PayPal. PayPal also owns Venmo, a popular online payment service. Venmo has over 40 million monthly users, demonstrating the significance of Cryptocurrency.
Even though PayPal and Venmo are relatively new to the crypto community, there are also plenty of other tools that help users buy, sell, and hold Cryptocurrency. Square (SQ) and Respective Tasks, two well-known competitors to PayPal and Venmo, back Cryptocurrency, broadened Bitcoin’s appeal.
The concept of Bitcoin as a protected currency is growing in popularity, as previously mentioned. There is a growing tendency in today’s economic and social world to use less cash available and protected from price volatility.
Recently, a trend has emerged in which publicly traded companies are transferring cash from their financial government bonds to Bitcoin as a more stable store of value. A business research agency, MicroStrategy, was the first one to convert $425 million in profits in its bank account to Bitcoin. Shortly after, the business was purchased for $50 million by Square, a payments company.
Since then, several other companies have also followed suit. The conviction that these companies and their investors have in Blockchain has given Bitcoin further credence like a store of value and a safe-haven asset.
What Factors Influence The Price Of Bitcoin?
As the price of every other trading commodity, the cost of Bitcoin is determined by supply and demand. The existence of such global structural occurrences, on the other hand, could affect Bitcoin’s value: India’s demonetization of banknotes, for example, had such a positive impact on Bitcoin during 2016.
If we look back a few years, a 2019 bull market could have been triggered by Facebook’s announcement of the Libra initiative. When reports about the difficulty of Libra’s control began to circulate, the bull-run began to lose steam. Apart from extensive global activities, several Bitcoin heavy-bag investors, also regarded as Bitcoin Whales, exist. They have thousands of BTC in their possession, which is enough to cause big enough frequent price swings.