What factors caused the price of the first cryptocurrency to grow more than $3,000 in half an hour on October 1 and what to expect from the quotes in the near future
Crypto experts explained what provoked the sharp rise in quotations and what to expect from bitcoin in the near future.
Growth drivers
The main reason for the growth of bitcoin and the entire crypto market – it is positive news, explained the head of the analytical department of AMarkets Artem Deyev. He recalled that the payment system Visa announced the development of a blockchain network for easy and fast conversion of tokens, stabelcoins and national digital currencies. The analyst also noted the statement of Federal Reserve Chairman Jerome Powell that the U.S. will not follow China’s example and will not impose a ban on cryptocurrencies.
Powell’s words matter for the entire crypto market, not just for U.S. investors, said Nikita Soshnikov, director of the cryptocurrency exchange service Alfacash. The U.S. market is one of the largest for cryptocurrency, and U.S. regulators’ decisions are affecting projects around the world.
Deyev considers another positive factor to be the lifting of a temporary ban on mining in Iran, which had been in place since late May due to drought and power shortages in the country.
“On the combination of these factors, bitcoin today exceeded $47,000. Its growth pushes the entire market, which will remain in a positive trend, unless there is a new negative regarding increased regulatory pressure”, Deyev added.
The negativity is digested by the market
The second important factor that may support the bitcoin exchange rate is China’s surrender of its position in the crypto market, according to Soshnikov. According to him, news about the Chinese authorities’ repressive measures against miners and cryptoinvestors is no longer able to have a lasting and crushing effect on the crypto market.
“News from China, as we see it, is digested by the market in a matter of days and is not capable of having a serious impact on quotations”, the expert said.
Last week, the People’s Bank of China imposed a complete ban on cryptocurrency transactions. The use of digital assets in the country now equates to illegal financial activity. After this announcement, the bitcoin exchange rate fell by $3,000 per hour. The services provided by cryptocurrency exchanges to Chinese residents were also outlawed.
Against the background of the statements of the country’s authorities, the Chinese online commerce giant Alibaba notified about the termination of sales of cryptocurrency mining equipment from October 8. Also about the suspension of sales of mining equipment said the company Bitmain, which plans to move production to other countries.
What to expect next
Given the recent movements in the market, bitcoin has every chance to consolidate above $45,000 and exceed $50,000 by the end of the month, Soshnikov predicted. He believes that the forces of “bulls” in the crypto market have not yet been exhausted and bitcoin can updаte the historical maximum by the end of this year with their help.
It is likely that in the near future it is worth expecting the first cryptocurrency to approach the level of $48.5-49.5 thousand, said Deev. But the market will need strong incentives for growth above $50 thousand, he added.
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