What Has Fueled The Rally In Bitcoin After Its Fall Below $30,000 Mark?

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Jack Dorsey recently said cryptocurrencywould be a “big part of the company’s future.”

To say that Bitcoin has had an eventful year so far would be an understatement. From record highs to quick slumps, the cryptocurrency has seen it all in the first eight months of 2021. To put things in perspective, in January 2021, Bitcoin found itself hovering around the $37,000 mark, only to move to an all-time high of over $65,000 it recorded in April. But this high was not sustained as it came to crash below $30,000 in May.  Despite the fall, if one were to compare Bitcoin’s value for the same period in 2020, the leap in value is almost unprecedented. With a value of $6,640 in April 2020, Bitcoin has managed to provide a return of over 800 percent to investors in the financial year 2020-21 alone.

After a worrying several weeks of a downward trajectory taking it below the  $30,000 mark, the cryptocurrency showed signs of recovery when it soared to a six-week high of $40,501.70, early this week. On Monday, it reached its highest level since mid-June, recording a 9% jump from its Sunday value.

Favour from big names

 After dumping Bitcoin for Dogecoin, citing environmental impact, Tesla and SpaceX founder Elon Musk recently hinted at a resurgence of interest in Bitcoin. The entrepreneur said that both he and the company, SpaceX, held bitcoin.  Similarly, Twitter CEO Jack Dorsey said that the cryptocurrency would be a “big part of the company’s future.” 

Investors were also further emboldened by a job call by Amazon in which the company mentioned that they needed a candidate to fill the position of a “digital currency and blockchain product lead.” This led to whispers that the e-commerce giant could soon begin accepting bitcoin for payment, which the company has denied.

Short Positions

Short covering is the process in which investors who operate under the assumption that bitcoin prices would continue to fall liquidate their positions. This could be a reason behind the rally, given that nearly $800 million in BTC short positions were liquidated on the evening of August 8 alone. 

In addition to Bitcoin, Dash, Ether and Litecoin also picked up over the week after a slump, at an average of at least 3 percent. However, as Bitcoin saw a slight dip on August 12, it is all eyes on the market on how the next few days will pan out.

Author: desi123

Desi123.com is an online news portal that aims to provide the latest trendy news for Asians living in Asia and around the World.

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