CEX.IO company blog | Bitcoin price broke through $23,000 – what is the reason?

Over the past 24 hours, the BTC rate has overcome several levels and reached a new historical high. Yuri Mazur,Head of Data Analysis DepartmentCEX.IO Broker, gave his comment on what influenced such a rapid growth of the first cryptocurrency.

The main recent reason was liquidity,recruited by market makers from November 25 to December 15. After the price of BTC / USD reached 19,800, many long positions were closed in order to take profits and the volume to buy decreased. As a result, new liquidity was needed to form the volume to continue the upward movement.

Another global reason for achievingThe bitcoin mark of $ 23,000 has become a rule that has long been known to all traders and investors: the direction of the trend is the most likely direction of further price movement. In this case, the trend was upward, so the price continued to go up. Also, an important technical factor was the type of correction that took place from November 25 to December 15 - an ascending triangle. This corrective pattern has a great incentive for the price to rise and also contributed to the continuation of the upward movement after the end of the correction.

Well, and the main fundamental factor, in mylook, there was a boom for bitcoin among large market players, who, in the face of an unprecedented global economic downturn, had to urgently redistribute capital in order to preserve it. In other words, they needed defensive assets, not least to protect against the increased inflation that began to emerge from the massive economic stimulus measures during the COVID-19 pandemic.

And their eyes fell on bitcoin, first of all, because ofits fundamental principles of work as a blockchain, laid down in the protocol: limited to 21 million BTC and strictly regulated emission, the speed of which cannot be changed by external interference. Further demand for bitcoin only grew, supported by the trend and strengthening of bitcoin as a new alternative asset.

 

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