On Monday morning, the price of Bitcoin made a big jump to over $90,000. However, it quickly faced some resistance and slowed down. This situation has many people wondering if this rise in price is just another short-lived increase, like what has been happening over the past few weeks. In the past, Bitcoin’s price went up to $90,000 but then dropped again and didn’t show much movement afterward.
Some experts think the recent surge is happening because more people, including big investors known as whales, are buying Bitcoin at the same time. A cryptocurrency analyst, CW, says this is especially interesting because regular people are starting to buy Bitcoin again. Retail investors (individual non-professional buyers) had stopped buying Bitcoin after its crash back in October. According to CW, this could signal the beginning of a bigger market rally (when prices increase for a longer time).
CW wrote online, “Big investors and smart individual buyers are both purchasing Bitcoin right now. Retail buyers joining the market again is a key change.” CW thinks that only smart investors are actively trading now, which might be a sign that prices could start rising steadily.
In another comment, CW explained that the majority of cryptocurrency exchanges are showing strong buying activity for Bitcoin. Platforms like Binance, which is the world’s biggest cryptocurrency trading site, are seeing whales (wealthy or influential investors who can affect market trends) return to the market.
However, not everyone agrees on Bitcoin’s future price movement. Another analyst, Ali Martinez, shared a different opinion. Martinez believes Bitcoin could be experiencing a “dead-cat bounce.” A dead-cat bounce happens when an asset’s price temporarily goes up after it has been falling. But instead of continuing to rise, it drops even lower afterward (learn more here: Dead-cat bounce).
Martinez explained his view by pointing out that there isn’t much new money coming into Bitcoin or the cryptocurrency market overall. In fact, he noted that money is leaving the market, with net capital flow (the total amount of money entering minus money exiting) being negative. He said the net capital flow has dropped to below -$4.5 billion, meaning the market is losing money.
Martinez added that Bitcoin’s price trend mirrors the activity in spot Bitcoin ETFs (exchange-traded funds, explained here). Spot ETFs have lost value over time. For example, they went from almost $63 billion in early October to under $57 billion by Friday.
Right now, Bitcoin’s price has increased by 2.3% in just one day. It’s still trading near $90,000 after Monday’s jump. This growth also seems to be helping some other cryptocurrencies, known as altcoins. For instance:
- Ethereum (a decentralized platform for building apps, detailed here) went above $3,000.
- Binance Coin (BNB, the native token of Binance, explained here), rose to over $860.
- XRP, a fast settlement-focused cryptocurrency (learn more), reached $1.90, which is considered an important support level.
For now, people are debating whether Bitcoin’s latest price increase marks a strong recovery or just another temporary rise before it drops again.