Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Bitcoin is Back to Top $40K: Possible Reasons Why

CryptocurrencyJul 28, 2021 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
Bitcoin is Back to Top $40K: Possible Reasons Why

  • Bitcoin users started to suffer from FOMO after rumors surged about Amazon (NASDAQ:AMZN) becoming interested in cryptocurrencies.
  • The price of Bitcoin increased by 15% in a matter of hours, indicating a “short-squeeze.”
  • Elon Musk has proven Bitcoin holds value despite his previous Twitter and media antics

Bitcoin has rallied towards the $40,000 level after more than six weeks of trading between two price poles. In addition, cryptocurrency sentiment briefly improved as it reached 32 out of 100 on the Fear and Greed Index, while the idea of FOMO (fear of missing out) is starting to circulate among retail investors as Bitcoin posted a 15% price increase. Still, Bitcoin’s price hasn’t been heavily impacted since it digressed due to China’s crackdown on cryptocurrencies and mining.

Every Piece Of News Helps

Bitcoin volatility is not conditioned by “US macroeconomic news“; yet, as per an American Institute for Economic Research study, scalability news matches Bitcoin’s price movement. Thus, the cryptocurrency market is a slave to its own influence. As Nikolaos A. Kyriazis argued, negative information towards Bitcoin has a higher impact on the price of Bitcoin rather than any optimistic news.

While both negative and positive news impact Bitcoin unevenly, current cases indicate the magnitude of the news influences Bitcoin. Amazon’s bid to increase exposure towards cryptocurrencies through their “digital assets” job posting briefly stimulated investors’ interests. However, the already debunked rumor that Amazon will start accepting Bitcoin and other cryptocurrencies, along with an affirmation that Amazon will start developing their digital currency, was the primary catalyst for bullish news.

As Crypto Banter highlighted, the rumor has more profound implications as Amazon continues to flout global payment providers such as Visa (NYSE:V) or Mastercard (NYSE:MA). Truly, Amazon’s take on cryptocurrencies would fully leverage their use cases by cutting out the middleman. In doing so, Amazon would increase its profit margins. However, a spokesperson for Amazon quashed any market rumors claiming “the speculation that has ensued around our specific plans for cryptocurrencies is not true.”

Elon Musk Boosts Positive Momentum

Elon Musk’s influence on the crypto market earned him the “most hated” person in the crypto “prize.” Yet, his latest incursions and discussions about Bitcoin helped boost positive momentum for the currency. During his appearance at the B-Word conference, Musk highlighted that he, Tesla (NASDAQ:TSLA), and SpaceX own Bitcoin and that Tesla will resume accepting it once mining becomes more reliant on greener energy.

Furthermore, Tesla’s $1.5 billion bitcoin purchase from Q1 is still intact on the company’s balance sheets. Therefore, their Q2 earnings indicate they incurred a $23 million impairment due to Bitcoin’s price. Still, as the report suggests, Tesla’s income quadrupled whilst in Q1 and they flipped some of their Bitcoin when the price surged.

On The Flipside

  • The current price action of Bitcoin bears a resemblance to the previous bull run cycle, which could help predict the price in the coming weeks.
  • Bitcoin failed to hold the above $40,000 mark, denoting it was just a longer short hunt.
  • Crypto investment outflows continue to surge as investors removed $28 million, with Bitcoin amounting to a total of $24 million in outflows.

Tether The Shorts

The cumulative news regarding cryptocurrencies pushed Bitcoin above the previous resistance level. Jim Cramer, a CNBC analyst, indicated Bitcoin “feels short-Squeeze-ish” as the news around Tether and Amazon surged. Additionally, Glassnode confirmed the short reports as the extent of the jump was credited to over-leveraged positions.

Furthermore, Bloomberg reported Tether could face formal charges over bank fraud which gave Bitcoin market confidence as it contradicts the standards of USDT. Still, Humphrey Yang emphasized Bitcoin remains a volatile asset and, despite the current surge, investors should not change their strategy after a sudden price increase.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

[contact-form-7] You can always unsubscribe with just 1 click.

Continue reading on DailyCoin

Bitcoin is Back to Top $40K: Possible Reasons Why
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email