- Bitcoin surged past $89,000 and was up 30% over the past week, leaving many wondering what’s behind this rise.
- Rising open interest and increased trading volume indicate strong market activity, but have also led to significant liquidations.
Bitcoin [BTC] has recently captured the attention of the crypto market and is up an impressive 30% in the past week. The leading cryptocurrency has hit new all-time highs for more than three days in a row.
The last peak was recorded at $89,864, currently holding BTC trading at $89,319– a slight decline of 0.6% from the peak.
This rapid price increase has had a positive impact on Bitcoin’s market capitalization, bringing it to almost $2 trillion, a figure that puts it among the eight largest assets globally.
This rise has also boosted the broader crypto market, with the global market capitalization increasing by 7.5% to over $3.1 trillion. Furthermore, Bitcoin’s daily trading volume has seen a significant increase, from less than $50 billion last week to more than $140 billion today.
Why has Bitcoin risen?
As Bitcoin’s bullish momentum continues, several factors are contributing to the ongoing rally. One of the main reasons for the question “why is Bitcoin on the rise” is the recent re-election of pro-Bitcoin politician Donald Trump as the 47th President of the United States.
Trump’s support for BTC and the broader crypto industry has fueled optimism in the market.
Investors are betting that his presidency will bring much-needed regulatory clarity, creating a more favorable environment for cryptocurrencies. During his campaign, Trump’s promises – including the creation of a national Bitcoin reserve – further boosted investor confidence, contributing to the positive price movement.
Another factor that answers this question is the recent high-profile institutional activity. MicroStrategy, a prominent institutional investor in Bitcoin, announced a $2 billion purchase of the cryptocurrency.
The company Acquired 27,200 BTC at an average price of $74,463 per coin, resulting in an immediate profit of more than $300 million on this latest investment. Such large-scale purchases by institutional players not only validate Bitcoin’s position as a major asset but also influence market sentiment, further driving its price higher.
In addition to these macroeconomic and institutional factors, open interest in Bitcoin has increased.
Facts of Coinglass indicated an increase of 10.26%, with a current valuation of $54.38 billion. In fact, open interest volume increased significantly, by 111% to $221.58 billion.
Source: Coinglass
The increasing open interest indicates growing market participation and increased interest in BTC derivatives, which often indicates an increase in trading activity and market engagement.
BTC liquidation trends
While Bitcoin’s price rise has created excitement, it has also led to increased market volatility and risks for certain traders.
Data from Mint glass showed that a total of 175,515 traders were liquidated in the last 24 hours, resulting in a total liquidation count of $693.87 million.
Source: Coinglass
Read Bitcoin’s [BTC] Price forecast 2024-25
The majority of these liquidations involved BTC and Ethereum, with $271.99 million and $85.74 million in liquidations respectively.
Short traders in particular have borne the brunt of this market move, with $218 million in Bitcoin shorts and $48.78 million in Ethereum shorts wiped out.