Why the Bitcoin Price is Rising Despite Negative News?

Bitcoin price rises 4%

In the past 24 hours, bitcoin has experienced a rollercoaster ride in price. After a significant dive of 5%, the price suddenly started to rise again, seeing an increase of over 8%. The surge allowed bitcoin to climb back above $27,000, but the course was forced to stop just above this point, as the major resistance to break lies at the $27,300 price zone, which is also the point where the 50-day moving average is found. It is critical to hold the $25,500 zone at present, and the price of bitcoin on crypto exchange Coinbase is currently at $26,835.

On the Dutch crypto exchange Battle, the bitcoin price in euros stands at 25,002 euros, marking an almost 4% increase compared to 24 hours ago.

Why is the BTC price rising today?

The sudden increase in bitcoin price may arise from the fact that GM, one of the biggest car manufacturers globally, announced that it is seriously considering accepting bitcoin as a form of payment. This could have inspired some degree of confidence in bitcoin amongst traders and investors alike.

However, there has been a lot of negative news associated with bitcoin lately. The day before yesterday, Binance was sued by the US regulator, the Securities and Exchange Commission (SEC). Yesterday, the SEC took Coinbase to court. These are evidently negative developments, and the initial reaction of bitcoin was a major crash. Fear spread among investors, causing the BTC price to fall back to the $25,500 price level.

However, it is that price level that seems to be of interest to many traders. If we look back, we will see that this level has acted as a support zone in May 2022. Later, in August 2022 and February 2023, this price level acted as resistance.

Bitcoin dips below 200-week MA

Over the longer term, the $25,500 price zone has proven to be an essential area for many investors. With the price dip, BTC fell below the 200-week MA, an MA that the price rarely dropped below. Currently, this level seems to be an attractive place for traders to buy bitcoin. The analysis of Negentropic suggests that it is mainly the demand on the spot market that caused this increase, and high leverage traders are now liquidated. Moreover, it is mainly short-term investors who sold their BTC, while investors with a long-term strategy continue to hold on tight.

Despite the dramatic situation nowadays, the blockchain analytics platform Glassnode reminds us that the bitcoin market had similar experiences before. Think about Terra (LUNA) and FTX, two giants that both went down, but despite the fears at the time, the number of “non-zero” bitcoin wallets grew by more than 5.42 million.

Despite the cataclysmic implosions of both LUNA and FTX, the number of unique #Bitcoin addresses holding a non-zero amount of coins has expanded by +5.42M, suggesting that network adoption remains resolute.

🔴 Growth from LUNA to FTX: +1.06M
🔵 Growth from FTX to present: +4.36M pic.twitter.com/FPoA470jjB

- Advertisement -

— glassnode (@glassnode) June 6, 2023

Therefore, while the current situation may look alarming, history tells us that growth in the network is bound to remain resolute, and bitcoin will continue to be a force to reckon with.