Regaining momentum, Bitcoin surpassed the $20,000 threshold on Monday for the first time since November. According to CoinMarketCap, the most well-known and valuable cryptocurrency in the world by market capitalization increased 0.70 percent to $20,817.37 at 6:00 IST. In the previous day, the market capitalization of bitcoin climbed by more than 0.63 percent to $40,101,586,225. Many people were taken aback by the unanticipated gains against the backdrop of the market's ongoing negativity.
The crypto market may have increased in anticipation of a potential slowdown in the Federal Reserve's (Fed) rate increases following a minor decline in inflation in December, according to experts.
The financial market, gold, and bitcoin have already been impacted by inflation. However, a recent wave of encouraging macroeconomic data, particularly indications that inflation is slowing, may have been beneficial for cryptocurrencies.
In anticipation of the alleged "halving event" in 2024, analysts are likewise optimistic about Bitcoin. It has been noted that Bitcoin's miner rewards are halved every four years (3.125 BTC). Additionally, the supply is decreased, which is thought to favor Bitcoin's price increase.
The fall of Terra Luna, the bankruptcy of FTX, the largest cryptocurrency exchange, and concerns over global socioeconomic unrest all contributed to the nearly 65% decline in the market value of bitcoin in 2022.
The growing demand for Bitcoin is a further element driving up its price. The demand for Bitcoin rises as more people and companies start to accept it as a form of payment.
Demand is increased by the fact that more individuals are purchasing and holding Bitcoin as awareness and interest in it develop.
The current increase in price of bitcoin may possibly be the result of futures traders attempting to take advantage of momentary liquidity shortages now that some major participants have departed the cryptocurrency industry. This may indicate that the recent gain is only a passing blip rather than a general increase in market confidence. The expert did, however, add that he thought the market was close to bottoming out.