The beginning of the week seems to be quite bullish for Bitcoin (BTC) and most digital currencies. The virtual currency has surpassed $17,000 for the first time in a month, changing the sentiment in the crypto industry from bearish to bullish, at least in the short term. Multiple other coins are also registering gains as the whole market turns green.
Bitcoin Surges Above $17,000, which are the reasons behind?
For the first time since mid-December, Bitcoin (BTC) surpassed $17,000 per coin according to data shared by CoinGecko. The largest digital currency is now leading the market and it has helped the whole industry to register gains in the last few hours.
Bitcoin registered a price increase of 2.2% in the last 24 hours followed by Ethereum (ETH) with an increase of 5.8%. Binance Coin (BNB), the virtual currency of the Binance ecosystem, grew by 6.2% after weeks in which it was controlled by bears. Thanks to this bullish impulse, Bitcoin surpassed $17,300 and hit a market cap of $333 billion.
Cardano (ADA) was the virtual currency with the largest gains in the last 24 hours. The coin grew by 12.8% and it allowed the digital asset to hit a price per coin of $0.3245 and a market capitalization of $11.35 billion.
Another thing that is worth pointing out is that in the last 24 hours, all the top 100 digital assets registered gains. Only stablecoins were traded without changes during that period of time. This shows that there has been a strong inflow of money to multiple digital assets and that we could be at the beginning of a very positive week for crypto investors.
But what are the reasons for this price increase in virtual currencies? Basically, there has been a strong push from traditional financial markets. The Wall Street Journal reports that the Dow gained over 250 points after Friday’s rally. This can also be seen in virtual currencies. Bitcoin was also traded higher on Friday and this rally continued today.
Cryptocurrencies have been traded quite similarly to traditional financial markets in recent years. When Bitcoin entered its last bear trend in November 2021, it was the month in which the U.S. Federal Reserve (FED) changed its approach to inflation rates, which were starting to move higher.
Traditional financial markets have also had a strong impact on digital assets in recent years due to the expansion of virtual currencies among institutional investors and other regulated markets. It is now much easier to get access for institutions and large market participants to cryptocurrencies than it was in the past.
Many years ago, with Bitcoin bull and bear markets, we could see that digital currencies were not correlated to stocks or traditional financial markets. Therefore, Bitcoin and other coins were used as alternative investments to reduce investors’ exposure to financial markets. Nowadays, things have changed, and we see that Bitcoin and other cryptocurrencies. It is a matter of time to see what could happen with Bitcoin and whether this is just the beginning of a longer bull trend.
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