Bitcoin Rally 2021: Analysis, Causes & Future Outlook

The year 2021 has been a roller coaster journey for cryptocurrencies. From record highs to quick slumps, the year 2021 has seen it all when it comes to the cryptocurrency market. Let’s consider Bitcoin for that matter. It was in the month of January 2021 that Bitcoin was hovering around $37000. Just a few months later, it had set a record high of $65000. To make matters worse, the price of this cryptocurrency slipped to a record low of $30000. Despite all this, investors do not lose faith in Bitcoin for the sole reason that it stands the potential to bounce back to normal. The returns that this cryptocurrency has managed to earn for the investors is the reason why it never fails to impress.

After a prolonged period that saw a download trajectory in the price of Bitcoin, this cryptocurrency showed signs of recovery when it soared to reach a mark of $50000. With this recovery, all the global investors are flocking back to invest in the cryptocurrency market. Today, the situation is such that the investors are not only buying Bitcoins but are also hedging their bets and buying other crypto assets.

Though it is a little difficult to arrive at what could be that one contributing factor to justify the increase in users over the last few days, one thing is for sure – the investors are all set to widen their investment portfolio by investing in cryptocurrencies.

With Elon Musk recently hinting at a resurgence of interest in Bitcoin and Twitter CEO Jack Dorsey quoting that Bitcoin would be a “big part of the company’s future”, a lot is being said about the possible enormous growth in the price of this cryptocurrency. Also, owing to the recent positive announcements made by Coinbase and Paypal in support of crypto has changed things for the better. In the midst of all this, how can one not mention short-covering, a process in which investors who operate under the assumption that bitcoin prices would continue to fall liquidate their positions. Many analysts believe that this could be a reason behind the rally.

Bitcoin price has been increasing steadily for a couple of months now. A lot can be attributed to the fact that the confidence of many buyers seems to be returning to crypto assets. Today turns out that not only have the old investors become more active, even new ones seem to be coming in. According to industry experts, investors across the globe seem to have made large investments into the crypto assets during the price dip, which has resulted in the latest bull-run across crypto assets.

The fact that the bitcoin technicals are looking better than before, the price structure on the higher time frame turned bullish after five weeks and the potential that Bitcoin has justified why all eyes are on the cryptocurrency market. We definitely need to watch out for how the next few days will pan out.