Bitcoin Price Rises To Near $24K, So What Made This Rally?

Bitcoin Price Rises To Near $24K, So What Made This Rally?

The price of Bitcoin increased Wednesday as markets rose, reaching its highest level in more than a month.

Its price had increased by about 10% during the previous 24 hours at this time. Additionally, it had increased by around 35% from its June 18 low of $17,592.78, which was a recent low.

The digital asset somewhat declined after achieving its local peak and is currently trading closer to $23,400.

Several experts cited a larger stock market surge and the steadily improving investor attitude when explaining these most recent gains.

Independent crypto expert Armando Aguilar expressed his opinion on the matter.

“U.S. equities closed another day with big gains as more corporates reported earnings and beat forecasts. This has appeased investors who are worried about inflation and higher production costs that can hurt the bottom line,” he stated.

“Equities in Asia and Europe also rallied and provided bullish sentiment for investors who might have some appetite for risk-on assets,” Aguilar noted.

“The S&P gained 2.8% on Tuesday and tech-heavy NASDAQ saw a 3.1% gain,” he said, noting that today was “the best single day trading for the S&P 500 since June 9 and best day for NASDAQ since June 24.”

“Correlation to equities has remained high and positive equity market momentum has definitely had an impact on digital assets,” said Aguilar.

Zilliqa Capital’s chairman, CEO, and co-chief investment officer Michael Conn added his voice to the discussion, asserting that some investors are turning to risky investments like Bitcoin and other digital assets as they become more optimistic at a time when the dollar is strengthening and gas prices are declining.

“This along with a ‘baked in’ expectation that the Fed will continue to raise rates to combat inflation is helping to improve investor sentiment,” he stated.

Budd White, cofounder and chief product officer of Tacen, added his voice to the discussion by highlighting the recent unrest in the markets for digital currencies and how this affected the value of the most well-known digital currency in the world.

“I think it’s pretty clear that with the massive liquidations that have happened since the collapse of the Terra ecosystem, we entered a situation in which Bitcoin was very, very oversold. There were forced sellers and then some,” he stated.

“And so I think Bitcoin’s price fell far below what would have been considered fair value – even for a macro environment as difficult as the one we are in right now,” said White.

“I suspect, therefore, we have hit a bottom for this bear cycle,” he stated.

“That’s not to say that Bitcoin can’t go lower – perhaps because of some black swan event – but the major liquidations have happened. Those who were prone to selling have already sold.”

“This helps explain why we have seen such major strength for Bitcoin, and I suspect that if we surpass $24,000, then the next level of resistance could be as high as $28,000,” White predicted.

“Now that the speculators have sold out of the market, there is the additional utility value to Bitcoin that has been generated by a net increase in the number of new active wallets globally,” the analyst claimed.

“And so it stands to reason that Bitcoin’s recent strength also stems from an increase in longer-term investors getting more and more exposure recently.”

“This isn’t to say that we are somehow in a bull market again. That’s not the case, I don’t think, and it’s possible that we will be ranging for months and months,” he noted.

“But we certainly are in an accumulation zone for investors,” said White.

“If anything, if we step back and think about what is happening, the recent strength shown by Bitcoin is indicative of just how antifragile this asset really is. It’s been through hell and back over the last few months, and just look at it now. Remarkable!”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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