Despite the fact that Bitcoin is still trading significantly below its all-time high of nearly $65,000 set in April, it has made a remarkable recovery during the last eight days.
The flagship cryptocurrency gained 6.1 percent after returning to $41,000. Other digital currencies, such as the second-largest coin Ethereum, have risen in tandem with Bitcoin.
Here’s what’s driving Bitcoin’s price higher:
Three causes, among others, have driven Bitcoin, according to current analytics data.
However, these three measures, provided by a popular analytics company, have skyrocketed, and when they do, the market normally rises, according to the analytics team.
According to the analytics study, Bitcoin’s social and trading volumes hit a 5-week high this week. The number of Bitcoin wallets has increased to a three-week high.
CryptoQuant’s proposed factors
According to statistics supplied by a CryptoQuant analyst, there are now three positive reasons contributing to Bitcoin’s increase, but only in the near term.
First, there is the spot market. Bitcoin reserves are on the decline. Second, Bitcoin derivative reserves are trending sideways on the chart, with projected leverage near zero, driving speculators out of the market. The third factor is that exchange-held stablecoin holdings are migrating towards Bitcoin.
There isn’t likely to be a breakout anytime soon, and here’s why:
Michael van de Poppe, a prominent Netherlands-based analyst, does not believe the Bitcoin price will break out anytime soon.
Before that happens, he believes the flagship digital currency must make a higher low, which Bitcoin is already doing, according to a tweet he sent out on Tuesday.