Over the past 24 hours, the price of Bitcoin has shot up by more than 7% to move from a trading value of just over $28,200 to see the $30,000 price mark.
This is the first time that Bitcoin has traded at more than $30,000 since June 2022. This is following a 7% surge in the past day, an almost 8% increase in the past week, and nearly 50% in the last 30 days of trading.
This incline comes just ahead of a report expected from the United States Consumer Price Index (CPI). This report will give investors and traders information on how the Federal Reserve intends to combat inflation. In addition to this, there are a few factors that influence the price of Bitcoin, such as to sink the value or to drive it up like this latest incline.
Supply and demand of Bitcoin
Much like any other asset, the basic principle of supply and demand affects Bitcoin’s price. With more traders looking to buy Bitcoin. the demand increases and the supply decreases and the price rises. This is because of the capped supply of Bitcoin, governed by its inherent design – only 21 million Bitcoin will ever be created. This is especially prevalent with inflation at a record high at the US.
Community opinion and sentiment
How the crypto and Bitcoin community and individual investors feel about Bitcoin has a major impact on Bitcoin’s price. When investors are bullish on Bitcoin, they will buy more which attracts more investors because the price rises. On the other side of the coin, if they are bearish and believe the price will drop, they may sell, causing the price to decrease.
Similar to sentiment, the way the media casts a light on Bitcoin plays a significant role in the price of Bitcoin. Any positive news can attract new traders increase demand and the value will rise.
The media often reports on major events or developments in the crypto space. This can include regulatory changes, technological advancements, and high-profile and institutional investments. These events tend to have an impact on the price of Bitcoin, as they influence investor sentiment and trigger market movements.
Bitcoin’s media attention can come from a number of sources. This can range from crypto-centric sources such as 7Bitcoins, to financial news platforms.
Regulations and legal action taken by governments has a massive effect on the price of Bitcoin. When governments impose restrictive regulations on Bitcoin, fewer investors can actively buy and trade Bitcoin which drives down trading volume and value. Conversely, when governments adopt favourable regulations, it can increase demand, which can drive up the price.