Bitcoin climbed above $39,000 on Sunday evening, the highest level since mid-June, as investors reacted positively to a recent sell-off.
According to CoinDesk data, the cryptocurrency was trading at roughly $38,059.84 at 11:05 p.m. ET, up nearly 11% from the same time the day before. Bitcoin earlier reached a 24-hour high of $39,544.29, the highest since June 16. Other cryptocurrencies have benefited from Bitcoin’s gain, with ether rising 5.9% to $2,299.55. As of 11:05 p.m. ET, the whole cryptocurrency market had gained nearly $114 billion in value in just 24 hours.
The rebound comes after bitcoin recently dipped below $30,000 due to a global stock market sell-off, raising concerns that it could fall further lower.
“I believe we saw a period of accumulation around 29-30K, indicating bullishness and a potential climb toward $40K for Bitcoin,” said Vijay Ayyar, head of business development at cryptocurrency exchange Luno.
Wood in focus
Twitter CEO Jack Dorsey, Tesla CEO Elon Musk, and ARK Invest CEO Cathie Wood all spoke at The B-Word, a well-attended bitcoin conference. Musk stated that as more bitcoin mining shifts to renewable energy, Tesla would likely resume taking bitcoin for vehicle purchases. Tesla halted cryptocurrency vehicle purchases in May, citing concerns over the “rapidly expanding use of fossil fuels for bitcoin mining.”
The energy-intensive process of creating new bitcoins, including solving complicated math problems, is known as BTC mining. The processing power necessary for this uses a significant amount of energy. “The Chinese trading day has begun, and the Elon/Jack/Cathie discussion has been bullish,” said Alex Brammer of Luxor Mining, a BTC pool for experienced miners.
Other bullish headlines for bitcoin have appeared. Amazon is trying to hire a digital currency and blockchain expert for its payments division, implying that it looks into BTC.
According to an Amazon spokeswoman, Amazon is excited by the innovation happening in the cryptocurrency area. According to bitcoin mining expert Brandon Arvanaghi, these bullish actions have also contributed to a so-called short squeeze.
Short sellers gamble that the price of BTC will continue to decrease. However, if the price rises, these investors will cut their losses and exit their short positions, causing the price to rise even more.
According to Luno’s Ayyar, “I believe the amount of the jump probably drives by over-leverage shorts.” Meanwhile, some of the problems that have been weighing on bitcoin’s price have started to fade. China has stepped up its anti-cryptocurrency assault in recent months, focusing on mining and trade. Concerns about BTC mining’s carbon footprint are also starting to fade.
According to Luxor Mining’s Brammer, the ambiguity around mining’s environmental impact and Chinese regulatory worries have worn off.