4 Reasons why Bitcoin shot up above $20k and is it time to buy?

Bitcoin

TLDR

  • Bitcoin value has seen fluctuations since the start of 2022, seeing new lows.
  • The price value of BTC improved recently, as it was able to cross $20.8K.
  • The improvement has been triggered by Washington’s focus on crypto and other reasons.  

Bitcoin price value saw new lows in November and December 2022 because of increased vulnerability. Both long- and short-term investors were worried because of the continuous lows. Though there was stability in its value in the closing week of December, there had been no significant rise.

The new changes show that Bitcoin price value has shot up as it crossed $20K and is likely to rise further. Here is a brief overview of Bitcoin’s recent activity and why it has shot up again.

Bitcoin and its gradual decline

Bitcoin’s decline started as the result of a ban from China and the Russian invasion of Ukraine. The increase in global economic crisis and increase of rates by the US Federal Reserved worsened the problems. The increase in problems caused panic amongst investors as they went for sell-offs. A further addition to the problems was the collapse of major names in the crypto market.

FTX collapse was the biggest incident that incited a speedy decline in crypto investment. Billions in funds from crypto investors were lost and stuck because of the company’s filing for bankruptcy. Binance was also on the verge of collapse as rumors were spread regarding increased withdrawals. But fortunately, it came out of the problems safely with the help of the Tron Foundation.

BTCUSD 2023 01 14 12 45 05
Source: TradingView

The increased vigilance and restrictions on crypto had resulted in a decline in its value. Crypto, especially Bitcoin, came to the market as an alternative to traditional payment options. When the customers didn’t see it as an alternative to the traditional financial system, they were worried. The result is evident in the form of new lows as Bitcoin’s value even touched the $15K range.

Reasons Bitcoin has shot up again

The recent changes show that Bitcoin’s value has shot up again. The recent liquidation data shows that Bitcoin liquidations have reached $4.70 million, which is about 224.83 BTC. According to CoinMarketCap, the global market cap value has improved by 8.69% over the last 24 hours.

The improvement in global market cap value is the summary of a positive week. Currently, the value of BTC stands at the 20,886.30 level, indicating further improvement. The positive trend has been incited by the improvement in various indicators. These are discussed as follows.

Focus on crypto in Washington

The renewed focus on crypto in Washington has resulted in the improvement of its value. The lawmakers have been on high alert since the November collapse of FTX. As a result of the efforts of LEAs and DoJ, Sam Bankman-Fried was arrested. The result has been an improvement in investor trust. Furthermore, SEC has charged Gemini and Genesis over their ‘earn’ programs.

Lowering risk resulting from fraud and other issues

As a result of enhanced vigilance and focus on crypto, the risk for crypto investors has been lowered. As the collapse of FTX and other major names took place, there was an increase in uncertainty. US House Republicans have announced a special subcommittee for crypto, which will oversee the problems of crypto. The mentioned committee will work on lowering risks for investors.  

Favorable environment for investors

A favorable environment for investors is possible when there is an increase in customer security. The investors felt clueless when major names collapsed, and there was no prevention to it. The result had been an increase in fears as the global market cap value lowered from the $1 trillion mark. As the market remains favorable, there is a chance that its value will improve further.  

Stability in the value of Bitcoin

Bitcoin had remained vulnerable as its value is currently 71% lower than its all-time high. Despite the lows, there has been an improvement to $20.8K, and it is expected to rise further. If Bitcoin rises to $21K, there is a chance that a rally will follow. Thus, the chances of its improvement will increase.

Why is it time to buy BTC again?

It can be safely said that it is time to buy Bitcoin again because of the current trend. The positive trend has persisted for a week, and it is high time when investors can benefit from it. The price value of Bitcoin is likely to retest the ATH of 2017, and it might prove to be a good omen for it. Interested investors would prefer to go on buying spree to fill their wallets. The value of Bitcoin has resisted many difficulties, and the current trend can be an end to the crypto winter.

Bitcoin price value has improved as a result of a new influx of capital. The increased stability of the market and lowered vulnerability has helped it fight the current odds. As the improvements continue, there have been some reasons that triggered the bull run for it. These include the increased sense of customer security, Washington’s focus on crypto, and a favorable environment.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Written by Muhammad Ali

Muhammad Ali is an expert on crypto investments. Loving to write about fintech, he joins the team to provide detailed analyses of the hottest crypto news.
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