Bitcoin price index has recently surpassed a string of key resistances at $12,000 and $12,500 enroute to reach yearly highs of $13,200. The top cryptocurrency by market capitalization underwent this considerable milestone in a space of two days and is looking likely to move past even further with a strong bull sentiment. But, the million dollar question is that where it will go from here?
Why Bitcoin Price Index Suddenly Increased?
The all important Bitcoin price index rose to a yearly high above $13k because of a multitude of reasons. The first and foremost of them is that several large investment groups starting to invest in the crypto. Grayscale Investments, a prominent Bitcoin holder announced its quarterly report in which it showed that it had invested over $1 billion in the cryptocurrency sector (most of it in Bitcoin itself) in Q3 of 2020. Considering the total market capitalization of the cryptocurrency before the recent bull move was around $200 billion, this was a significant sum. In addition to Grayscale, Square also announced a smaller yet significant investment ($50 million) in the sector.
The most recent bull factor for the cryptocurrency was the launch of cryptocurrency buying/selling services by Paypal, one of the largest payment companies of the world during the last week. This development meant that many of the millions of Paypal account holders around the world got access to buying Bitcoin in a short period of time and as a result, Bitcoin price index flashed green considerably.
According to Sui Chung, the CEO of a subsidiary of Kraken crypto exchange:
That PayPal, a household name, has received a conditional BitLicense is likely propelling bullish sentiment. Today is significant as a signpost for further price appreciation in the future…
Another reason for the significant price increase of Bitcoin was its overall dominance within the crypto sector. Previously in the earlier months, the cryptocurrency sector had experienced a kind of bull run but Bitcoin itself saw its share reduced in the market because of the exceptional performance of the DeFi sector. However, the market took a big dip during September and October but the price index of Bitcoin remained largely the same, thus increasing its overall share. As historical data shows, once Bitcoin’s dominance increases in the market, the chances of a bigger bull run increases and the same phenomenon was experienced yet again as Bitcoin rallied while the rest of the cryptocurrencies either remained around the same figure or grew at a snail’s pace. With Bitcoin’s dominance ever increasing, it can be predicted that the cryptocurrency may increase its worth even more in the near future while the altcoins will struggle to keep up.
The cryptocurrency sector is united in its belief that Bitcoin is in for a significant bull run in the future as was experienced after previous halvings in 2012 and 2016. However, the main disagreement is when it will actually begin. Some analysts have already jumped the gun and declared that the anticipated bull run has arrived. However, there is a need to exercise caution as it is still only a few months since the halving and it may take us some time to get there. However, the latest price move at suggests that even if it is not the start to the bull run itself, it is laying considerable groundwork for the future move.
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