Wednesday saw Bitcoin continue its ascent, breaking above $63,000 for the first time since November 2021.

According to Coin Metrics, the flagship cryptocurrency's price increased by about 6% to $60,356.75. It had earlier moved below $64,000 after briefly touching $64,000. It's currently barely below $68,982.20, its all-time high.

The sudden changes in price have been whipsawing both bulls and bears. According to CoinGlass, centralised exchanges had short liquidations of $176 million and long liquidations of $86.1 million over the previous day.

When traders short bitcoin using leverage and the price of the cryptocurrency rises, they buy bitcoin back from the market to cover their bets, which drives up the price and results in the liquidation of more holdings. On the other hand, those who wager on a price rise have to liquidate their holdings to make up for their losses.


The market is even more eager to see that level retested now that the record is in plain sight. Following a week-long hiatus in this year's rise, Bitcoin has increased by around 20% just this week. It has increased by about 40% for 2024.

While there may be resistance when bitcoin approaches $69,000, according to Antoni Trenchev, cofounder of the cryptocurrency exchange Nexo, breaking through $60,000 should pique the interest of investors who have been holding out for this year's gain, especially retail investors. JPMorgan claims that following a lull in January, their interest in cryptocurrencies has increased this month.

Because the introduction of ETFs makes the asset class more accessible to institutional investors and because the network is about to undergo a halving event, which has historically signalled a significant rise in the months that follow, investors anticipate that bitcoin will establish a new record this year.

 

“Zach Pandl, head of research at Grayscale Investments, stated that "demand for bitcoin is colliding with increasingly tight supply." The Bitcoin network presently creates [approximately] 900 coins every day, or roughly $54 million worth of bitcoin, assuming a price of $60,000. In contrast, the new U.S. spot bitcoin ETFs brought in an average of $195 million each calendar day in February.”

“Owing to the impending halving of Bitcoin in April, issuance will decrease by 50%. Because there isn't enough bitcoin to meet the increased demand, prices are rising due to supply and demand dynamics.

The Bitcoin code requires an event called the halving, which lowers the mining incentive by half to control supply. April is when the next halving is anticipated to occur.

Stocks linked to bitcoin saw a boost from the cryptocurrency's early ascent, but these gains were reversed when the price of bitcoin declined. The Bitcoin proxies Microstrategy and Marathon Digital saw increases of 10.5% and 2.4%, respectively. Block, a company that runs a bitcoin trading platform and maintains bitcoin on its balance sheet, had an increase of about 1%.

cryptocurrency trading After consumers noticed problems with buying and selling as well as mistakes with zero balances in their accounts, Coinbase returned a portion of its earlier gains. It ended the day 0.8% higher.