Bitcoin’s price movement is on fire, and it is now testing a significant level of resistance that may open the floodgates for bulls and propel the BTC price far higher. Traders are now perplexed and attempting to determine the true cause of the recent surge and if it will endure.
Bitcoin Price Hits Six-Month High
Bitcoin’s price has increased by more than 50 percent so far this year, and it has hit a price level of 24,900 today that it has not seen in almost six months. The crypto market lost around $1.4 trillion last year due to the industry’s extreme instability.
Reason number one
There is a high sensation of FOMO (Fear Of Missing Out) among traders and investors whenever bitcoin’s price movement shows signs of reviving. Investors are aware that despite all the criticism, major frauds in the cryptocurrency field, and regulatory issues, bitcoin is a beast capable of leaving all these concerns in the dust and rallying like there’s no tomorrow.
The instant bitcoin’s price seems to be moving somewhat, major headlines begin to surface in the media, causing people to get anxious and believe they cannot afford to miss the chance again. Fear of missing out is one of the primary causes for the present action.
Reason number two
A recent regulatory crackdown by U.S. regulators on the Kraken and Paxos exchanges had traders on edge from a fundamental perspective. The New York State Department of Financial Services instructed Paxos to cease the minting of BUSD, Binance’s stablecoin. Stablecoins are generally understood to be a kind of cryptocurrency that is partly backed by real assets and partially backed by cash, bonds, or other comparable assets.
The risk is that BUSD might be classed as a security by the SEC, and if that occurs, Paxos and Binance could face much larger problems in the days ahead.
Recall that the SEC sent a strong message to the industry when it penalised Kraken for their staking operation. The whole exchange-operated crypto staking industry is still at risk, since Coinbase’s CEO has expressed similar worries. Before becoming fearful of missing out (FOMO) on the current surge, investors must bear this in mind.
Notwithstanding these stringent and severe regulatory requirements, the SEC continues to assert that Bitcoin is a commodity and not a security. So, the money that once flowed into altcoins are not witnessing such a significant trend. In reality, because of the imminent danger of being branded as a security, more investors feel comfortable placing and leaving their money in bitcoin since it has already passed the SEC’s labelling test, which was the greatest threat to Bitcoin’s survival except its widespread adoption.
Reason Number Three
First, in terms of technical price movement, the BTC price continues to retain a strong correlation with equities, particularly the NASDAQ index. The index has increased by more than 16% so far this year as investors continue to purchase bargains after the technology sector saw a big sell-off in 2022. Bitcoin has outperformed the NASDAQ by more than three times year to date.
As a result of the improbable occurrence of a severe recession in the U.S. economy, the stock markets are expected to see more upward movement. If the risk rally gains further momentum and the connection holds, a robust bull trend might emerge.
Reason number four
The BTC price has been consolidating for an extended period of time, and only yesterday, with its new six-month high, did it break out of this consolidation zone. Now, all eyes will be on the next significant resistance level, which is the $30,000 mark. A breach of this resistance will allow the price to attack its next significant price level, which will be the psychologically significant 50K price level.
In conclusion, there is an element of fear of missing out (FOMO) influencing traders’ interest in the BTC price movement, as they are well aware of the cryptocurrency’s resiliency. The SEC continues to see Bitcoin as a beneficial commodity and maintains its position on the cryptocurrency. Lastly, the correlation between the NASDAQ and Bitcoin is increasing the interest of traders in Bitcoin.