Bitcoin [BTC] has recently been the center of attention in the cryptocurrency market, experiencing a significant 30% increase in value over the past week. The primary digital currency has continuously been achieving new record highs for more than three days in a row.
The most recent peak was reached at $89,864, with BTC currently being traded at $89,319—a small decrease of 0.6% from its peak.
This rapid price escalation has had a positive impact on Bitcoin’s market capitalization, elevating it to nearly $2 trillion. This places Bitcoin as one of the top eight largest assets on a global scale.
Furthermore, this surge has also propelled the overall cryptocurrency market, with the global market cap increasing by 7.5% to exceed $3.1 trillion. Additionally, Bitcoin’s daily trading volume has experienced a notable surge, rising from under $50 billion last week to over $140 billion currently.
What Factors Contributed to Bitcoin’s Rise?
As Bitcoin continues to demonstrate a bullish trend, several factors are driving the ongoing surge. One key reason for the question “why is Bitcoin up” is the recent re-election of pro-Bitcoin figure Donald Trump as the 47th president of the United States.
Trump’s vocal support for BTC and the broader cryptocurrency sector has generated optimism within the market.
Investors are hopeful that his presidency will bring about much-needed regulatory clarity, which would create a more favorable environment for cryptocurrencies. Throughout his campaign, Trump’s pledges, including the proposal for a Bitcoin national reserve, have further strengthened investor confidence and contributed to the positive price momentum.
Another factor that helps answer this question is the notable institutional activity that has taken place recently. Leading institutional investor MicroStrategy made a significant purchase of Bitcoin, acquiring $2 billion worth of the cryptocurrency.
The company bought 27,200 BTC at an average price of $74,463 per token, resulting in an immediate profit of over $300 million on this latest investment. Such substantial acquisitions by institutional players not only validate Bitcoin as a key asset but also influence market sentiment, driving further appreciation in price.
In addition to these macroeconomic and institutional factors, Bitcoin’s open interest has been on the rise.
Data from Coinglass has shown a 10.26% increase, with a current value of $54.38 billion. Open interest volume has surged even more significantly, rising by 111% to reach $221.58 billion.
The growing open interest indicates an expansion in market participation and a heightened interest in Bitcoin derivatives, which often indicates an increase in trading activity and market involvement.
Trends in BTC Liquidation
While the surge in Bitcoin’s price has induced excitement, it has also brought about increased market volatility and risks for certain traders.
Data from Coinglass revealed that a total of 175,515 traders were liquidated in the past 24 hours, resulting in total liquidations amounting to $693.87 million.
The majority of these liquidations involved Bitcoin and Ethereum, with $271.99 million and $85.74 million in liquidations, respectively.
It is noteworthy that short traders have predominantly faced the consequences of this market movement, with $218 million in Bitcoin short positions and $48.78 million in Ethereum short positions being wiped out.