Early March Saw Another Small Bitcoin Rally
Bitcoin shot up again in early March, and investors have been given another hopeful boost.
Bitcoin Hikes Its Price Up a Bit in Early March
The currency experienced a bit of dip towards the end of February. The world’s number one digital asset by market cap had shot up to a six-month high of about $25,000 per unit during the midway point of the month, though just a few weeks later, the asset had fallen to about $23,000, roughly $2,000 less than where it had been shortly before.
There are many reasons – according to analysts – as to why the jump is now occurring again. Some believe it is because China is lessening its hardcore stance on bitcoin, and this would indeed have positive social bearings for the token. China was once the bitcoin leader of the world, accounting for more than 70 percent of the planet’s overall mining projects.
However, in the summer of 2021, it shocked everyone by announcing that all bitcoin mining was no longer legal, and thus would be shut down practically overnight. From there, it went further in its anti-crypto ambitions by stating that all trading and similar activities would be banned as well, and thus anyone caught in the act would likely face penalties or even prison sentences.
In addition to the softer stance, positive manufacturing data has also emerged from China, which some industry heads think could lead to powerful trends for bitcoin and its digital cousins. Marc Chandler – managing director at Bannockburn Global Forex – explained in a recent note:
Many investors may be skeptical of the accuracy of Chinese data, but its stronger-than-expected February PMI animated the animal spirits and bolstered risk-taking appetites.
Oanda senior analyst Craig Erlam also threw his two cents into the mix, commenting:
Not one to miss out on a bump in risk appetite, bitcoin [was] trading more than two percent higher. It appears to have consolidated around late-February lows in recent days after failing to break key resistance – $24,500-$25,500 – in the middle of the month. That could be a sign of weakness, at least in the short-term, although ultimately, it’s hard to imagine that occurring if we do see risk appetite continue to improve.
A Big Change from 2022
In any case, the recent sentiment is a nice step in the opposite direction of where everyone was in 2022, arguably the worst year on record for crypto. During that time, bitcoin – which had previously been trading at a new all-time high of about $68,000 per unit – fell into the mid-$16K range, thus losing more than 70 percent of its value over the course of a single year.
Unfortunately, several altcoins decided to follow in its footsteps, thus causing the crypto space to lose more than $2 trillion in overall valuation. It was a sad and very ugly sight to see.
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