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Why Bitcoin Price Exploded to $9.4K Overnight !

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Avatar for jitender53
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2 years ago

The BTC (Bitcoin) Price increased overnight from $7500 to $9500 , According to Coinmarketcap increasing 23% in less than 24 hours.

The main three factors that run bitcoin rally at a highest spot exchange volume , it rise in institutional demand  and also chase historical resistance levels.

Bitcoin exited the $ 9,500 level by spot exchanges, not the futures market

In the world of crypto spot exchange is refers to a platform that provide facility from fiat to crypto trades like binance and coinbase for instance users have facility to trade bitcoin with USD and any other stablecoin(USDT) or fiat currency without leaverage.

Spot exchanges volumes coming from  are not inflated by leverage or borrowed capital. We can say that to increase retail demand Spot volumes typically demonstrate authentic  and they often increase during an accumulation phase.

Suddenly increase demand for Bitcoin on Coinbase reached a point where for the temporary period exchange could no longer handle user activity .

In February 2020 remained open interest of Bitcoin futures  above $1 billion and all the while its below $500 million. On BitMEX the open interest of Bitcoin , which refers to the total amount of short and long contracts open in the market

The dominance of spot platforms indicate that the upsurge from $7,500 to $9,500 was organic and relatively on futures exchanges volume of Bitcoin is low.

BTC broken Historical  levels with ease

Benjamin Blunts as known as cryptocurrency trader according to him , the Bitcoin price when it first surpassed $8,000 broke all major historical resistance levels .

When BTC first hit $8,000, it went up to as high as $9,500 swiftly. Consequently when we see Bitcoin surpasses important resistance areas without any pullback, it indicates that a stronger upside movement awaits. 

Institutional demand acted as a safety net it also help

In the first quarter of 2020, accumulation of Bitcoin by institutional investors is the key narrative around Bitcoin to raise the demand .

Grayscale said that 88% of investments came from institutions investors in the  quarterly report of Grayscale, which operates the Grayscale Bitcoin Trust, . According to its CEO said at the same time the assets under management (AUM) of the Grayscale Bitcoin Trust just hit $3 billion volume.

This quarter “88% of inflows came from institutional investors. Investment firm said that institutional investors  the overwhelming majority of which were hedge funds.

 

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