Something surprising is happening in the cryptocurrency market. There are still about two months left until the halving, and we are already close to ATH. We even beat them on some exchanges. What does it mean? We asked Sebastian Seliga, an expert on the zondacrypto market, for his opinion.
A zondacrypto expert explains what is happening on the market
The stock exchange expert indicates that “reaching a new ATH level by bitcoin is a phenomenon that attracts the attention of many people in the industry.”
There are many reasons for this, and understanding them requires an in-depth analysis of the market and the surrounding conditions. Firstly, the aftermath is the increase in the adoption of bitcoin by financial institutions, in particular the acceptance of BTC ETFs, which is a key driver for the market. When significant business entities decide to add bitcoin to their investment strategies, they introduce new capital to the market, which may result in a dynamic increase in demand.
Secondly, we cannot ignore the impact of the global macroeconomic situation. Political and economic decisions around the world are reflected in the value of traditional currencies, which may consequently increase interest in bitcoin as an alternative form of capital protection. Changes in global monetary policy, such as money printing by central banks, may lead to the depreciation of the value of fiat currencies and increase interest in “hard” assets such as gold or bitcoin. Many people see bitcoin as “digital gold” and a means of protecting against inflation, which can attract additional investment during periods of economic uncertainty
– Selig pointed out in the note sent to us.
However, it also points to other factors: “technological innovations and the development of the entire blockchain ecosystem”, which may also lead to an increase in the valuation of the cryptocurrency.
Introducing improvements that increase security, scalability and usability encourages new users to explore this market
– added.
Speculation above all!
However, Seliga also points out that when assessing the phenomenon of the Bitcoin price increase, we cannot forget about speculation and market psychology.
Investors' emotions and expectations play an important role in shaping prices on the cryptocurrency market. During periods of intense growth, the FOMO effect (fear of missing out) can further drive prices, especially in the context of positive news and buzz around record highs in the bitcoin price
– he explained.
When will the bull market end?
We also asked Seliga whether the current acceleration will mean that the bull market will end sooner than many people expect.
When it comes to the future and the potential end of the bull market, it is important to remember that the cryptocurrency market is unpredictable and dynamic. While rapid growth may suggest upcoming corrections, and ongoing factors such as adoption and innovation may maintain a long-term upward trend, the effect of the upcoming Bitcoin halving should definitely be taken into account.
In the past, we have observed that halvings often preceded significant increases in the value of Bitcoin. This is because reducing the rate of increase in the supply of new bitcoins while maintaining or increasing demand can lead to an increase in price. Investors and speculators, anticipating this effect, may increase their positions in Bitcoin before the halving, which may also contribute to price increases.
Add to this the fact that the upcoming halving could be seen as a supply-limiting event, and interest in bitcoin is growing as a 'harder' form of money, even more limited compared to traditional currencies that can be issued without restrictions by governments and central banks. Halving expectations could further inflate the price in the short term, potentially leading to greater volatility in the post-halving period
– zondacrypto expert answered our question.
