Home Business Why is Bitcoin price rising today? 2 causes

Why is Bitcoin price rising today? 2 causes

Bitcoin price has risen sharply in value since this morning. The increase appears to be largely due to expectations regarding American interest rates. Furthermore a short press for even more upward pressure.

Bitcoin price breaks out and hits $27,400

The price chart shows that Bitcoin started a significant upward move this morning. Bitcoin rose relatively quickly to a high of $27,419 at the time of writing.

The surge takes Bitcoin to its highest price since August 31st. The move follows a period of relative volatility during which BTC showed virtually no major moves.

Bitcoin price for the last 24 hours – Source: CoinMarketCap.

At the time of writing, the price of Bitcoin on the Bybit crypto exchange is $27,371. On the Dutch crypto exchange Bitvavo, the BTC price in euros is 25,681 euros.

Positive tones about inflation are good for Bitcoin

While such a surge is often caused by big news, that is not the case here. The rising Bitcoin price appears to be largely due to optimism about American interest rates.

This is expected to remain the case on Wednesday. Rising interest rates, however, would have been bad news. Traders believe there is a 99% chance the Federal Reserve will leave interest rates unchanged at 5.25-5.50%.

A pause in interest rate hikes could also be a signal that the phase of rising interest rates is coming to an end.

Short squeeze is another cause of rising prices

Finally one short press another possible factor giving an additional boost to the rising price. Short sellers are traders who expect prices to drop. Once the price rises, short sellers may be forced to close their positions.

Closing a short position is done by purchasing the underlying asset. If this happens on a large scale, a chain reaction can occur, which seems to be the case to some extent at the moment.

While the value of short liquidations is usually between $1 million and $150,000, in the last 24 hours this was close to $30 million.

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