Bitcoin has returned to the forefront with a price once again exceeding $38,500, to the delight of crypto-enthusiasts. But this bullish breath does not come out of nowhere. Analysis of the three main catalysts behind this rally.
MicroStrategy Casts Huge Bitcoin Bullish Spell
MicroStrategy CEO Michael Saylor is well known for being an avid bitcoin believer, putting billions of dollars into BTC over the years. And at the end of November, again: the company invested an additional $593 million in the purchase of 16,130 bitcoins!
Enough to cause quite a positive commotion on the market and give wings to the price of bitcoin. Because when a behemoth like MicroStrategy continues to accumulate crypto so massively, it pushes other players to follow suit.
We then speak of a “ripple effect”, a well-known phenomenon in economics to describe how the behavior of an opinion leader ends up being copied by followers, then creating an underlying trend.
In the crypto sphere, MicroStrategy and Michael Saylor clearly serve as charismatic leaders. Their every move is scrutinized by investors who tend to follow their asset allocation decisions.
Whales come out of their sleep
But Saylor is not the only cetacean to be agitated. Other whales indeed woke up in November after a long period of inactivity. One of them made a notable appearance by swallowing more 10,000 bitcoins (the equivalent of 460 million dollars!).
These mysterious investors with almost infinite pockets are called “whales” in crypto jargon, in reference to their ability to generate huge waves in the market following the direction of their movements. And when after months, even years of radio silence, these behemoths suddenly return to grab tens of thousands of Bitcoins, it’s guaranteed to be a storm!
As a result, with these mega-buybacks and those of MicroStrategy, the available supply of Bitcoins on the market found itself quite “thin” (reduced). An ideal situation to see the value of BTC soar under the effect of the relentless law of supply and demand! The more a resource becomes scarce, the more its price theoretically tends to rise.
General investor euphoria
The icing on the cake, in this concert of bullish announcements, investor morale has clearly improved after weeks of ambient gloom.
The Fear and Greed index which measures market sentiment has indeed returned to the “Extreme Greed” zone, reflecting the overwhelming enthusiasm of players for Bitcoin. A determining psychological factor, because when confidence dominates, all the lights turn green to buy!
Of course, the return of Bitcoin beyond $38,500 in no way guarantees the continuation of the rally in the coming days. But thanks to this clever mix between positive announcements, massive buybacks and general euphoria, the magic potion to make the price take off seems well and truly activated… Despite the commitment of players like Binance, it remains to be monitored whether good fairies or witches will come to upset fate!
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
