Bitcoin (BTC), the largest cryptocurrency in the market, has surged above $32,000 for the first time since early May. This shows that there could be a trend change in the market as Bitcoin recovers from being traded below $30,000 for some weeks. Despite this recent move in the market, Bitcoin might have a difficult time ahead if bulls don’t take control of the market.
Bitcoin Surges Above $32,000
Bitcoin and the whole cryptocurrency market have been moving higher in recent days. Indeed, Bitcoin is currently being traded at close to $32,200 at the time of writing, according to data shared by CoinGecko. In the last 7 days, Bitcoin has surged by over 10%, showing that there is a strong interest from the community in Bitcoin.
When it comes to altcoins, the largest gainer among the top 20 was Cardano (ADA), which registered a growth of close to 22%, more than doubling the growth experienced by Bitcoin during the same period of time.
There are few virtual currencies that have registered losses in the last 7 days, including LUNAC, GMT, APE, EGLD, DFI, STX and AVAX; among others. These coins have lost more than 8% of their value. Therefore, we see that this rally is mostly a Bitcoin rally with almost no contagion among altcoins.
The cryptocurrency market has been in a bear trend since November 2021 when most altcoins and Bitcoin reached new all-time highs. At the moment, this shows to be a correction amid a bear market. That means that we could see a continuation of the bear trend in the coming months for Bitcoin and other digital currencies.
Furthermore, the fall of the Terra ecosystem (LUNA) has been one of the main catalysts for Bitcoin and other virtual currencies to start moving lower in early May. Therefore, we should also closely follow this digital currency and see what happens to it. There is a project to revive LUNA but this might not have the right traction in the crypto industry.
There are other things to take into account when it comes to the price of most virtual currencies. It is important to follow how traditional financial markets behave and whether they are influencing investment decisions related to digital currencies. Let’s not forget that there are several companies that have already invested in Bitcoin and that could withdraw their funds from BTC if they feel uncertainty across financial markets.
Inflation data and interest rates are also important to understand what could happen to Bitcoin’s price. Indeed, the virtual currency could be heavily affected by possible changes in monetary policy around the world, especially in the United States. Following inflation data and FED’s decisions is a very important thing to do for those investors that closely follow the crypto market.
Finally, understanding how Bitcoin adoption expands in other countries is also a very important thing to do. After El Salvador, the Central African Republic was the second country to make Bitcoin legal tender.