Bitcoin (BTC-USD) has reclaimed ground above the $62,000 mark, with analysts suggesting that the worst of the selling pressure may be over. This surge comes on the heels of a dramatic event: an assassination attempt on Donald Trump. Investors speculated about the chances of the former president winning the November election, driving Bitcoin’s price up as much as 9.1% to $62,830. The Republican is seen as the more pro-crypto candidate, having hosted industry executives at Mar-a-Lago and with his campaign accepting cryptocurrency payments, a first for a major U.S. political party. But what other factors are contributing to this recent spike in Bitcoin’s value?
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What’s Behind the Recent Spike?
According to Ben Simpson, founder of crypto education platform Collective Shift, the recent “forced selling”—primarily $3 billion in sales from Germany and $8.5 billion in anticipated Mt. Gox repayments—has significantly impacted Bitcoin’s price. However, with these events now largely priced in, Simpson believes we’ve hit a local bottom, and Bitcoin is on the path to recovery. This, combined with the political developments surrounding Trump’s potential reelection, is creating a bullish sentiment in the market.
Josh Gilbert, a market analyst at eToro, echoes this sentiment, highlighting that recent political events, such as Trump’s increased odds of winning the upcoming election, have positively influenced Bitcoin’s price. “The attack on former President Trump this week has positively impacted his reelection odds, lifting Bitcoin and crypto assets in the process,” says Gilbert. This political development is seen as a bullish signal for the market, given Trump’s pro-crypto stance.
What Could Push BTC Even Higher?
The Crypto Fear & Greed Index, which plummeted to its lowest level in 18 months on July 12, suggests an unexpected mismatch between market sentiment and fundamentals. Simpson notes that despite this negative sentiment, the underlying fundamentals of the market remain strong.
Analysts are now looking at several key factors that could drive Bitcoin’s price higher. For instance, Jerome Powell’s hints towards potentially lowering interest rates, alongside a robust performance of the S&P 500 and increased Bitcoin ETF inflows, are seen as positive indicators.
However, Gustavo Schwenkler, director of Australian crypto exchange Cointree, advises caution. He notes that while lower-than-expected inflation figures in the U.S. and potential rate cuts are encouraging, a large upward swing in Bitcoin’s price might not happen overnight. “I think we will see BTC move around $55-65k at least until the Fed actually cuts rates,” Schwenkler adds.
Whale Activity
Interestingly, Bitcoin whales have been accumulating Bitcoin at an unprecedented rate, snapping up 71,000 BTC worth $4.3 billion during the recent price slump. This accumulation, the fastest since April 2023, indicates strong confidence among large holders about Bitcoin’s long-term prospects.
Mark Hiriart, head of sales at crypto asset manager Zerocap, emphasizes that Bitcoin needs to hold its current level. He explains that for Bitcoin to keep rising, it needs to stay above $60,000 and move higher over time. Hiriart also warns that the upcoming repayments to Mt. Gox creditors could put pressure on the market, causing short-term price swings.
What Is BTC’s Price?
At the time of writing, Bitcoin is sitting at $63,068.
Key Takeaway
In summary, Bitcoin’s recent rally above $62,000 is fueled by a combination of easing macroeconomic conditions, political factors, and huge whale activity. While challenges remain, the market sentiment is slowly shifting towards a more positive outlook, paving the way for potential growth in the coming months.
