Three factors converged to help the bitcoin price recover past $5,960 on Thursday, enabling the flagship cryptocurrency to place itself within striking distance of $6,000.
Bitcoin Price Recovery Targets $6,000
Since setting a new all-time high near $6,200 last week, the bitcoin price has struggled to maintain its forward momentum. Bitcoin received short-term support from traders due to the Bitcoin Gold hard fork, which airdropped coins equivalent to all bitcoin address balances as of block 491,407, which was mined Tuesday morning. Immediately following the fork, the bitcoin price began to plunge and eventually dipped below $5,400 as traders returned to the altcoin markets, whose market caps have hemorrhaged during October.
However, the bitcoin price sprang back toward $6,000 on Thursday, rising as high as $5,966 on Bitfinex. Bitcoin has since tapered to a present value of $5,916, but this nevertheless represents a 24-hour increase of more than 6%.
As is often the case, bitcoin is trading at a premium on Korean exchanges — even a high-volume one like Bithumb. At present, Bithumb prices BTC/KRW at $6,017 — a full $102 above the global average.
Factors Behind Bitcoin’s Climb
Bitcoin’s present recovery appears to be the product of several converging factors. The first factor is the abysmal performance of bitcoin gold during its first few days of open trading. Although the main Bitcoin Gold network has not yet been activated, several exchanges have already credited their customers with BTG balances corresponding to their exchange wallet balances at the time of the fork. At present, bitcoin gold is trading at just $125, indicating that it has little community support and that traders are not optimistic about its future prospects. No one expected bitcoin gold to threaten bitcoin, but bitcoin’s resilience in the face of yet another public fork is likely playing a small role in its recovery.
Bitcoin may also be riding a small wave of speculation ahead of Amazon’s Q3 earnings call. Last month, rumors surfaced that Amazon might announce at the earnings call that it is going to accept bitcoin. At the time, CCN.com reported that the source of those rumors was not credible. However, the rumor resurfaced this week in Die Welt, a widely-read German newspaper. It is unlikely that Amazon will announce that it is going to accept bitcoin, but it is possible that some traders are staking larger positions in bitcoin on the off-chance that the rumor proves to be accurate — an event that would almost certainly lead to an immediate price surge.
Finally, traders and investors may be reconsidering their earlier decisions to stake larger positions in the altcoin markets following the Bitcoin Gold fork.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:01 PM