Three reasons why the price of
Bitcoin is approaching an all-time high
Bitcoin has seen a significant rise in recent days, briefly crossing the $104,000
mark on May 9, before stabilizing at around $103,000
achieving monthly gains of nearly 33%.
This jump raises questions about :
the possibility of recording a new historic peak in the near future, especially in
light of the availability of a number of basic factors that
support this upward trend, including:
First :
Decreased flow of Bitcoin to trading platforms :
One important indicator supporting the recent rise is the decline in the net flow of
Bitcoin to central trading platforms, which was evident during most of last week.
This decline indicates that
an increasing number of investors are withdrawing their currencies from platforms
with the aim of self-storage, what is understood as a signal of intention to hold the
currency and reduce the desire to sell
thus reducing supply pressure and vice versa.
Second:
The increasing interest of
individuals and institutions
Google searches for Bitcoin have seen a significant rise recently
reflecting a growth in individuals' interest in the currency.
This is clearly :
- demonstrated by the Bitcoin network registering about 350,000
- new wallets within one day, indicating a wide entry of
- individual investors due to the fear of missing opportunities.
Although :
- this phenomenon has historically been associated with market peaks
- the current numbers are still below the maximum levels that
- preceded previous historical peaks.
Third: Geopolitical factors
One of the external factors that may contribute to supporting Bitcoin is
the upcoming meeting between American and Chinese officials.
The two sides
- are expected to discuss calming trade tensions
- and the US President recently hinted at the possibility of
- easing tariffs imposed on China.
Such a thaw in trade relations between the world's two largest economies
could reduce global uncertainty and boost risk appetite in markets
which could benefit digital assets.
Despite :
the positive signs, some warning signs are emerging.
The Fear and Greed Index rose to the level of 73
which reflects a prevailing mood of excessive optimism.
Also
the Relative Strength Index (RSI) shows a reading of 75, indicating that
the currency may be overbought, which may enhance
the chances of a temporary price correction.