In the past 24 hours, the bitcoin price has seen a gain of around $1,000 and surpassed $13,150 across major crypto exchanges, demonstrating strong momentum against the U.S. dollar.
The upside movement of bitcoin comes after it saw a large pullback in the tune of 30 percent earlier this month during which the dominant crypto asset dipped to as low as $9,700.
Since dropping below $10,000, the bitcoin price has surged by more than 30 percent in eight days.
Technical analysts have said that the recovery of bitcoin from relatively large short term corrections have strengthened the foundation of the current rally of the asset.
One crypto technical analyst said:
The BTC Bull Run barely even started. According to 2015 fractal, the road to 6 digits was confirmed when we broke $10K. It will be a journey packed with FUD, bans, hacks and all sorts of manipulations. But nothing worth having comes easy, especially financial freedom.
While the surge in the bitcoin price over the past two to three months is widely believed to be technical, there are important contributing fundamental factors that have acted as potential catalysts of the entire crypto market.
Along with the consistent inflow of institutional capital through custodian solutions, investment vehicles, and futures markets, the hash rate of the Bitcoin blockchain network has recorded its fastest rate of growth in history.
“The Bitcoin network hashrate has just recorded its fastest growth in history. BTC Bitcoin’s total hashrate (on a 7-day moving average) has increased by 13.11 EH/S over the past 30 days – its fastest pace ever,” said Binance Research.
An increase in the hash rate of the Bitcoin blockchain suggests growth in the amount of computing power securing the network, which historically has indicated an overall increase in confidence from the mining ecosystem.
Brian Kelly, the CEO of BKCM, stated that many miners have already acquired capital to finance their operations throughout the next 12 months with the intention of not selling bitcoin in the near future.
As the block reward halving of the Bitcoin network approaches and miners sell less BTC to the global market via over-the-counter (OTC) exchanges, the decline in supply could affect the price of the asset.
“I’ve talked to a lot of miners around the world, a lot of them have said they have sold enough bitcoin to get us through the next year or so and we are going to hoard bitcoin at this point in time and we are not going to sell it and the supply of bitcoin will get cut in half. Just real simple economics: lots of demand hitting little supply, price goes higher,” Kelly said on CNBC’s Fast Money.
Despite the 30 percent gain of bitcoin over the past eight days alternative crypto assets have struggled against BTC.
While bitcoin recorded a four percent gain on the day, other assets like Ethereum, XRP, Litecoin, and Bitcoin Cash recorded losses in the range of one to three percent against the U.S. dollar.
The growing dominance of BTC over the global crypto market supplemented by its increase in price suggests that investors are expressing more confidence in BTC due to the fundamental factors on the horizon that could fuel its momentum throughout 2019.
Last modified: March 4, 2021 2:37 PM