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Bitcoin Price Surges After Elon Musk Said Tesla will Resume Accepting it For Car Purchases

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Bitcoin Price Surge

Bitcoin price has surged over 12% in the last few days to hit above $38,000. Its highest price in the last 2 months. For the last few weeks, the cryptocurrency market has been on a bear trend. Coming a few days after the market had realized the highest price gain in history. During the drop, the price of bitcoin fell below $30,000 for the first time in a few months. However, the market seems to be reversing towards bullish terms. Bitcoin price gain has caused other cryptocurrencies to rise. This is because it is the market leader and any reaction causes a response across the market.

Bitcoin

Reasons for the Bitcoin price rise

  • In a discussion between Elon Musk (Tesla CEO), Jack Dorsey (Twitter CEO), and Ark Invest CEO, Cathie, Elon said Tesla will resume accepting Bitcoin for transactions. This is a reverse to the earlier decision in May when Tesla ceased accepting Bitcoin. The market is receiving this confirmation as a signal to buy. Hence, the reason why the price is rising.
  • Bitcoin price has been at a support zone after the recent fall from the highs of $60,000. Failure to push further to the downside symbolizes weakening selling pressure signaling the possibility of a reversal. This weakening is giving the bulls control helping to push the price upwards.
  • Short seller’s push- This happens when the price rises triggering stop losses by the short-sellers. This increases the buying pressure pushing the market higher. Most of the bitcoin short positions were liquidated after the price rose. This has fueled the price rise as the short sellers continue to exit the market.
  • Amazon has said it will start accepting cryptocurrencies for transactions. Innovation and infrastructure improvement happening in the industry infrastructure is making it easier to transact with cryptos. These are some of the factors attracting Amazon to consider this alternative. This announcement has made investors excited hence the reason for the increased demand.

Bitcoin, is it a bubble waiting to burst?

Volatility

Since its inception, the bitcoin price has been very volatile. The current price movement doesn’t mean it’s the start of a sustained bullish trend. It might be a short-term reaction to the factors highlighted above. Although the price of Bitcoin has been on a bear trend in the last few weeks, it remains one of the most profitable investment assets.

Elon Musk Factor

Elon Musk continues to be the most influential person towards the price of cryptocurrencies. Some of the top cryptos he influences include;

  • Dogecoin
  • Shiba Inu
  • Baby Dogecoin
  • Bitcoin

His influence in these currencies will likely continue. Although cryptocurrencies have little use In comparison to the traditional currencies, investors continue to see them as high potential return assets. Specifically, their decentralized nature has attracted investors that normally won’t put their funds into the formal financial systems.

6 Top Cryptocurrencies You Need To Invest In 2021

Conclusion.

Bitcoin remains the most valuable and popular cryptocurrency in the market. Lately, there have been challenges as some of the big markets restrict their activities. A key example is a recent decision by China to ban all mining and transactional activities on cryptocurrencies. Despite these challenges, this recent upward price movement could be an indicator of resilience and confidence in Bitcoin.

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