Bitcoin Price is Ready to Break $10,000—Here’s Why
Bitcoin’s price has plunged below $11,000 for the first time in over a month, breaking two support levels in less than a week. The world’s largest cryptocurrency is now trading at the $10,200 levels, slightly recovering from its low of $10,024, according to stock market recovered and reached a record high after the first stimulus package check. It was mainly driven by high-quality tech-driven company stocks, including Apple and Tesla. Tesla’s price was trading around 70.10 on Mar. 18 and reached 502.49 on Sep. 1. This surge resulted in more than 7 times in value under the current economic turmoil. Now time for cash out for some investors. Long-time Tesla shareholder Baillie Gifford, an asset manager based in the UK, sold around 19 million shares on top of the 10 million shares he sold during the first half of the year. The Tesla stock price fell nearly 25% after it hit a record high this week.
The same story also applies to Bitcoin. On Mar. 13, the Bitcoin’s price crashed to as low as $3,600 on BitMEX. With the addition of the fiscal stimulus package, Bitcoin witnessed multiple bull runs. According to CoinGecko data, Bitcoin’s price hit its 2020 high of $12,400 on August 18. Coinbase CEO Brian Armstrong revealed data that showed that Americans have been depositing amounts similar to the stimulus checks offered to citizens.
The internal pressures of the crypto sell-off, which causing the recent crypto market crash has also been intensified by external factors such as the halt to money printing. The internal pressures of the crypto ecosystem were also accelerated by the lack of money printing lately, which would eventually lead to a shortage of money supply.
Other than the economic stimulus package which acted as a catalyst for bull runs, another major driving factor is the rising popularity of decentralized exchanges (DEX), which has been captivating investors’ attention. These new ecosystems ignited the surge of Ethereum and Bitcoin’s price as well.
Recently, some novel DeFi projects listed in decentralized exchanges, including Uniswap and its hard fork Sushiswap have also seen its prices surge, followed by a sell-off. Those who have profited a substantial amount are now ready to cash out.
What to pay attention to
As previously reported by Blockchain.News on Aug. 11, MicroStrategy purchased 21,454 Bitcoins for $250 million, averaging $11,652.84 per Bitcoin. As a HODLer, it seems MicroStrategy would not consider violet price fluctuations and high volatility to be an alarming factor of this asset. This also provides us a benchmark of how much Bitcoin is valued by institutional investors.
What we need to pay attention to are cryptocurrency whales such as Grayscale, after all, they can make a profit from either shorting or longing Bitcoin and may consider high volatility as an attractive factor.
Reports on economic stimulus packages will no doubt seriously affect asset prices. As the US election is approaching, the competition between Trump and Biden will be intensified, and future policies may cause violent fluctuations in the market as well.
With additional reporting provided by Kun Hu.