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On august 10, Bitcoin price hits 2-week high, will this prove to be bearish for Bitcoin?

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Bitcoin hits 2 two week high and rose above $29,700 on  August 10, 2023,as investors are looking forward to upcoming Us inflation data later in the day. The world’s largest crypto currency made last up 2.5% at  $29,720.90.

  1. What could be the reason behind the rise?
  2. Rise in institutional buying of Bitcoin -Major institutions such as Tesla and MicroStrategy have been buying Bitcoin in recent months, which has helped to boost demand.
  3. Rise in inflation– In many countries of the world inflation is rising, due to which investors are searching for the alternative to fiat money and that has led to purchase of crypto assets such as Bitcoin.

iii. Improved government regulation -In some countries, Governments have started favouring Bitcoin, which has developed a sense of security in the mind of investors and they are inclining towards Bitcoin.

  1. Is this the start of a new rally in Bitcoin price?

There two major aspects that should be studied carefully

i)Influx of money– It is a possibility that owing to rise in price of Bitcoin,the other crypto currencies will also rally.It will induce the fear of missing out with chance in minds of investors and they will start buying and more speculative funds will flow in the cryptomarket and that lead to rise in Bitcoin further

ii)slowing the process of interest increment-If the Fed starts slowing the process of raising interest then it might weaken the dollar. This could give rise to two outcomes on the price of Bitcoin.

  • Risk on rally will gain momentum-this situation is beneficial for Bitcoin as it will increase its demand.
  • Dollar price decline– Bitcoin price are inversely proportional to the value of dollar index. With the decline in dollar index there will be surge to the Bitcoin price.

FAQS

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Q1.What arе US inflation data figures and why arе thеy important for Bitcoin and thе  has been crypto markеt?

US inflation data figures are the monthly reports that measure the rate of inflation in the United States. The US inflation data figures are important for Bitcoin and the crypto market because they can affect the value of these assets. Assets such as Bitcoin has been identified as hedge by investors against the increasing inflation. This can lead to an increase in the price of Bitcoin. However, it is important to note that the relationship between inflation and Bitcoin is not always straightforward. Sometimes, when inflation is high, the price of Bitcoin can actually fall. This is because of the panic selling triggered by investors who are more risk-averse in a high-inflation environment, and they may choose to invest in more safer assets other than Bitcoin.

Q2.How is the current price of bitcoin significant in the crypto market?

As of August 10, 2023, 15:00 PST, the current price of Bitcoin is $29,559.46. This is significant because it is the first time in over a month that Bitcoin has consistently held above $29,000. This could be a sign that the cryptocurrency market is stabilising after a period of volatility. If Bitcoin can continue to hold above $29,000, it could signal a reversal of the recent downtrend. And will be indicator of new rally in the cryptocurrency market. This could also attract new investors to Bitcoin.

Q3.Is Bitcoin a good investment?

Other than first cryptocurrency, Bitcoin is known for many benefits like lower transaction fees, higher level of security which helps investor in expanding their portfolio. As per various renowned financial experts, bitcoin is an excellent long-term investment. However investor’s financial situation and tolerance to risk will determine whether they should buy bitcoin or not.

Q4.Why is Bitcoin going up and down?

The combination of supply, demand, production costs, competition, regulatory developments, and the media coverage that follows influences investor outlook, which is one of the most significant factors affecting cryptocurrency prices. As the result of NFP and inflation data is out it misleading to speculation and hence there is huge movement in prices of Bitcoin.

Q5.Will Bitcoin rise again ?

Since quite long time analysts have observed positive corelation between Bitcoin’s price S&P 500 index, which translates to possibility that as the index goes up, we also see surge in the price of Bitcoin. This suggests that as long as risk on rally continues Bitcoin’s value will continue to rise in the future.

Q6.When should I buy a Bitcoin in Low or high?

Cryptocurrency like Bitcoin are highly volatile and may experience frequent fluctuation in prices as like other assets .With price volatility, fear of missing out and uncertainties also arises and a simple thumb rule is to buy when prices are low and sell when prices are high, also applies to Crypto market and thus it also applies to Bitcoin.

Q7.How does a weak NFP report lead to the price rise of Bitcoin?

A weak non farm payroll report can lead to prices rise by two ways-

i.Weakening of US dollar- by weakening of US dollar the investors may start investing in alternative assets like crypto currencies and hence demand of Bitcoin may increase which may lead to rise in price of Bitcoin.

ii.As safe haven asset- it means the asset who retains its value or increases in case of economic uncertainty,the weak NFP reports leads the investor to invest in Bitcoin as Safe haven asset due to less regulatory interference and thus price rise of Bitcoin.

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