The price of Bitcoin again exceeded $ 9,000 this morning, so it is the second time this month that has happened. After the fall last week from that level, all losses have been reversed since the weekend. So what could be responsible for the change in bitcoin trend?
Chinese New Year
The Lunar New Year always has an effect on bitcoin trading volumes, as Chinese merchants take a few days off to celebrate. Although cryptocurrency trading is technically banned in China, the provisional solutions by which traders use other Asian markets mean that it is still statistically significant.
BitMEX CEO Arthur Hayes predicted that volatility and volume of trade would "sink" as the New Year approached. In fact, in the week before the New Year, daily volumes fell by 50%, as the price of BTC followed them down by $ 9,150, reaching a minimum of $ 8,325 on Sunday.
Since Sunday's minimum, the volume has already recovered almost all of the previously lost value, and prices have steadily increased to reflect that increase. While Coronavirus may have meant a prolonged holiday for many Chinese, the orders to stay at home do not apply to those who work outside the law.
Increasing market capitalization in general
As recently reported, the total capitalization of the cryptocurrency market grew by more than $ 17 billion in just 48 hours. It has continued to grow at a more modest pace since then, but is currently only $ 1.2 billion below the psychologically significant mark of $ 250 billion.
The market capitalization was the last at this level in November, during the seven-month bear market when cryptocurrency prices were falling from their highs at the end of summer 2019.
Recovering this level would be a strong indicator that this trend had reversed, and that a bullish cycle is underway again.
Bitcoin Halving getting closer
As February approaches, the market cannot fail to consider historical data, which traditionally highlights the month as one of the most optimistic for Bitcoin. Of course, this does not give any guarantee, and in fact we are closing January, having resisted its usual tendency to be a bearish month.