Gold and the S&P500 have surpassed Bitcoin in reaching record highs, but experts in the market have identified key factors that could push BTC beyond its peak.
The German government’s massive liquidation of Bitcoin and the repayment announcement from MT Got have been reported as obstacles hindering the growth of BTC price.
Bitcoin is approaching a crucial resistance level at $70k as it continues to steadily climb, recording an 8% increase in the last 30 days. Currently, the asset is trading at $69k after experiencing a significant surge of 70% in daily trading volume, resulting in a Year-To-Date return of 56%.
While Bitcoin lags behind, gold is experiencing its best performance since 2010, trading at an all-time-high price of $2,718. The S&P500 has also seen a year-to-date surge of 23%, reaching a record price of over $5,870 on October 17.
Analysts investigating the reason behind Bitcoin’s failure to breach its record high in recent months have observed that it has risen too quickly since reaching $73,700. They attribute this to the consistent liquidations caused by the German government’s decision to sell off 88% of the 50,000 BTC seized from movie piracy operators. Additionally, the trustee for Mt. Gox announced repayments to creditors in Bitcoin and Bitcoin Cash, resulting in a mass sell-off and hindering BTC’s growth.
Further analysis of Bitcoin’s performance reveals that its availability for trade 24/7 makes it more susceptible to volatility, leading to liquidation and pressure that brings the asset below its fair value. The chart provided by Glassnode illustrates the level of Bitcoin distribution during the period under review.
During the dip, “whales and shrimps” took advantage of the opportunity to accumulate Bitcoin aggressively. Data from Santiment confirms an increase in the number of wallets holding between 100 BTC and 1,000 BTC from October 10 to October 13, while Bitcoin was around the $59k level.
Analysts believe that Bitcoin still has the potential to achieve a record performance, especially with reports of further rate cuts by Western central banks and the support for crypto from US presidential candidate Donald Trump. Additionally, Japan’s low inflation rate and rumors of the country’s central bank refraining from rate hikes could act as catalysts for Bitcoin’s surge.
Based on historical monetary decisions and their impact on the crypto market, it has been found that a small rate hike by Japan in early August caused a temporary drop in the Bitcoin price. Furthermore, Bitcoin has seen a 1000% increase against the Yen in the past five years compared to other currencies. Analysts find it plausible that the recent inflation news could propel Bitcoin to its record high.
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