In today's fierce competition in the digital currency market, Bitcoin has always been the focus of attention. Recently, the price of Bitcoin doubled in just 26 days, an astonishing increase that caught the attention of the entire market. So, what is driving the skyrocketing price of Bitcoin? Let’s unveil the mystery of this digital currency world together.

The reasons behind Bitcoin price surge

Before we delve into the reasons why Bitcoin prices are skyrocketing, we need to understand the basic concepts of Bitcoin. Bitcoin is an encrypted digital currency based on blockchain technology, and its decentralized characteristics give it unique value. In recent years, as the digital currency market continues to develop and grow, Bitcoin, as the first cryptocurrency, has gradually become a favorite among investors.

Balance between market demand and supply

One of the most direct reasons behind the surge in Bitcoin prices is the balance between market demand and supply. As the recognition of digital currencies continues to increase around the world, more and more investors are beginning to transfer funds to digital currencies such as Bitcoin. This increased demand has fueled a rapid increase in the price of Bitcoin. At the same time, the total amount of Bitcoin is limited. According to its design, the total amount of Bitcoin will not exceed 21 million. The scarcity of supply has also become one of the important factors driving price increases.

Impact of global economic environment

The uncertainty of the global economic environment also affects the fluctuation of Bitcoin prices to a certain extent. In times of turbulence in financial markets, investors tend to move funds into safe-haven assets, and Bitcoin is favored as a safe-haven asset. Especially in the context of the global epidemic, investors' confidence in traditional assets has been challenged, and the digital currency market has become a new investment option.

Promotion of technological innovation

In addition to market factors, technological innovation is also an important driving force for the rise in Bitcoin prices. With the continuous development and improvement of blockchain technology, the security and scalability of Bitcoin have been further improved, attracting more investors' attention and capital inflows. At the same time, as a digital currency, Bitcoin’s convenient transaction methods and global features also provide strong support for its price increase.

Influence of Social Psychological Factors

Finally, social psychological factors also affect Bitcoin price fluctuations to a certain extent. As the media continues to report and promote Bitcoin, the public's awareness of Bitcoin has gradually increased, and investor confidence has also increased. This social psychological effect will further promote the rise of Bitcoin prices, forming a virtuous cycle.

Conclusion

To sum up, the reason behind Bitcoin’s price doubling in just 26 days is a combination of multiple factors. The balance between market demand and supply, the uncertainty of the global economic environment, the promotion of technological innovation, and the influence of social psychological factors have jointly promoted the rapid rise of Bitcoin prices. In the future, as the digital currency market continues to develop and improve, Bitcoin price fluctuations will continue to be affected by a variety of factors. Investors need to maintain a cautious and optimistic attitude, treat investment risks rationally, and seize investment opportunities. The mystery of Bitcoin is gradually being unveiled. Let us wait and see and witness the wonderful future of the digital currency world.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Bitcoin price surges 2x in 26 days! What's behind the rise in Bitcoin price?
In less than a month, the price of Bitcoin (BTC) has tripled, surging from $3,600 to $7,350. Traders believe that a combination of factors contributed to the surge, but there are likely three main ones.

The three factors are a sharp increase in spot buying, a plunge below $4,000, and Bitcoin's immediate recovery to major support levels.

Bitcoin price increase factor 1: Bitcoin spot trading volume rises

The March 13 drop caused BTC to fall from $8,000 to $3,600 in 24 hours, and buying volumes on Coinbase, Kraken, , Bitfinex and other spot exchanges surged.

Meanwhile, open interest (a term used to describe the total number of long and short contracts open at a specific time) fell sharply on major futures exchanges, including BitMEX, Binance Futures and .

Aggregated open interest in Bitcoin futures Source: Coinbase, Skew

The sharp drop in open interest on futures exchanges and the apparent increase in spot buying essentially led to a shift in the market. The spot trading market began to control Bitcoin's price action, rather than the futures market.

Futures markets typically cause wild swings in Bitcoin prices because traders use leverage (borrowed funds) to trade cryptocurrencies, while in the spot market, investors buy and sell Bitcoin without borrowed funds.

This shift stabilized the market, allowing Bitcoin prices to rebound without a sharp correction and with relatively low volatility.

Bitcoin price rally factor two: BTC should not have fallen below $4,000 in the first place

On March 31, Coinbase published a blog post detailing the market trend after Bitcoin plunged to $3,600.

The exchange said that most of the platform's users bought Bitcoin after the sudden drop, adding that waterfall liquidations caused Bitcoin to fall much less on futures exchanges than on spot exchanges.

Coinbase explained: "The waterfall liquidations were most prominent on BitMEX, which offers highly leveraged products. During the sell-off, Bitcoin on BitMEX traded at a much lower price than other exchanges. It wasn't until BitMEX was maintained at a time of peak volatility (citing a DDoS attack) that the waterfall liquidations were paused and the price quickly rebounded. When the dust settled, Bitcoin was hovering around $5,000, having previously plunged below $4,000."

This opens up a theory that Bitcoin should never have fallen to $3,000 in the first place, explaining why Bitcoin rebounded quickly in a V-shape to $7,350.

Bitcoin price rally factor three: rapid recovery to key support levels

The $5,800 level has been a historically important support area since early 2018. It prevented Bitcoin prices from falling to between $3,000 and $4,000, except in December 2018.

Bitcoin prices quickly recovered from the $3,000 range to $5,800 in seven days. After three tests in March, the $5,800 level served as a strong floor, allowing Bitcoin to continue its rally.

Several prominent traders said that after breaking through $7,300, the $7,700 resistance level could be the next area for Bitcoin to test in the near term.