After an extended period of instability and numerous dips and increases in the market, it appears that cryptocurrency is going up again and traders are finally seeing some positive increases. The two leading cryptocurrencies – Bitcoin and Ethereum – have both shown long stints of stability and, in recent weeks, both have managed to do trades in a positive range.
Many crypto experts are anticipating that this increase is expected to continue in future months and this is largely down to the fact that macroeconomic conditions and easing across the globe, particularly in the U.S. and UK markets. Let’s take a look at some of the latest updates in answer to the question on everyone’s lips at the minute: is cryptocurrency going up again?
The Road To Recovery: Is Cryptocurrency Going Up Again?
Overall, it appears that the crypto trading market has shifted towards being positive instead of neutral. This year already, Bitcoin – the world’s largest cryptocurrency – has risen almost 70% and Ethereum has reached its highest peak since August 2022 – seeing an increase of 50% this year. Many industry insiders are already predicting that Bitcoin will hit an all time high this year.
Why Is Bitcoin Rising So Much?
This week, there has been a sharp rise in Bitcoin prices (almost 9%), which has then pushed it above $30,000 (£24,118) for the first time since June last year. The recent increase in Bitcoin prices and value has sparked many discussions within the industry about a new market boom, but why exactly is this cryptocurrency going up again?
It’s believed that the movement in Bitcoin began when the news of the fallout of the tech-focused Silicon Valley Bank broke, followed by its collapse. Since then, Bitcoin has steadily increased and has climbed almost 80% this year alone. Overall, the global crypto market is now trading at a higher level, plus, as well as this, experts predict that this recent surge in Bitcoin is also linked to the fact that more traders are showing confidence in the Federal Reserve (Fed), which is believed to announce a pause on increasing interest rates again due to fears of recession across global markets.
In a domino effect, these fears of recession across global markets have exposed risks and weaknesses within banking systems all over the world and traders have felt an increased appetite for decentralised currency, such as Bitcoin and other cryptocurrencies, which are seen as safer alternatives to conventional banking systems.
What Determines The Price Of Bitcoin?
Unlike traditional currencies (also known as fiat currencies), such as the GBP or US-Dollar, Bitcoin isn’t defined by a single entity as it would be within a central bank. Instead, it is defined by supply and demand, or the price which traders are willing to pay. When there is more demand for Bitcoin, similar to when other cryptocurrencies are going up again, the price increases and when this demand reduces, so too does the price.
The demand for Bitcoin is dependent on a number of factors, such as global events (including advances in stocks and price declines) and other economic factors, such as trade deals and conflicts. Unlike fiat currencies, which are subject to change in line with political and economical influences, Bitcoin is a fully decentralised system. There is no one regulatory authority which looks after the monetary base. Bitcoin also has the highest trading volume when it comes to cryptocurrencies, but compared to other global markets, it is relatively small market-wise.
Have Crypto Markets Turned Bullish?
A bull market occurs when commodities and securities are on the rise, such as now when cryptocurrency is going up again. Typically, this term is used to refer to the stock market, but it is applied to anything which is traded, such as cryptocurrencies, so yes the cryptocurrency markets have turned bullish. In recent times, the cryptocurrency market has seen positive signs following an ease in macroeconomic activities, which has then caused the price of cryptocurrency to increase. The current trading value of the cryptocurrency market has recovered to levels not seen since June 2021.
With the markets turning into bull markets, there is also the possibility that a rally occurs. A rally is a period of sustained increases in the prices of cryptocurrencies, stocks or bonds and it usually involves rapid and substantial increases over a short period of time. Rally, as a term, is used loosely when referring to upward swings in markets and is caused by significant increases in demand which is the result of a large influx of investment capital in the market. This then leads to the bidding up of prices.
What To Do In The Event Of A Crypto Rally
- Diversify your trading portfolio
- Spread your risk in order to lessen the impact of a downturn in a specific crypto
- Keep up to date with industry developments
- Don’t make impulsive decisions
- Follow a strategic investment pattern
- Store your cryptocurrencies in a secure wallet
Things Traders Should Be Aware Of With The Market Increase
With cryptocurrency going up again, there are some things which traders need to be aware of, or areas where they should show extra caution. There has always been the risk of market manipulation, but this risk increases when the market does. Market manipulation is where there are attempts to artificially inflate or influence the price of an asset, or overall market behaviour. This can involve a single individual, or group of individuals, looking to create an overriding illusion within the trading market.
Pump and dump schemes are the most prevalent offender when it comes to market manipulation, which is where a group of people work together to artificially inflate the value of a coin. This scheme is usually targeted toward low market coins which are available on limited exchanges, with the inside group buying the coins, then dumping them once there are enough traders and investors also buying the coin. This causes the group to gain a profit, whilst most other participants take a loss. Before trading, always do your research and due diligence before parting with any money.
Another thing to be aware of with cryptocurrency going up again is the likely increase in trading scams. Criminals will be aware that people will want to spend more investing in crypto, knowing that there is the possibility of getting higher returns, so will likely target new or inexperienced traders. If you believe, at any point, you have been the victim of a trading scam, then please get in touch with our team of recovery solicitors to start your journey.