The story behind the surge in Bitcoin prices to $7,300

In the past few months, the volatility of the digital currency market has made countless investors excited. Among them, the news that the price of Bitcoin has soared to $7,300 has attracted widespread attention like a bombshell. What kind of story is hidden behind all this? Why is this surge in prices accompanied by a liquidation of $90 million? Let's explore this phenomenon in depth and uncover the real reason for the surge in Bitcoin prices.

First of all, it is worth paying attention to the characteristics of Bitcoin itself. As a decentralized digital currency, Bitcoin has the characteristics of limited supply. According to the setting, the total amount of Bitcoin will be limited to 21 million pieces. This scarcity makes Bitcoin have special value in the market. And this characteristic is often amplified by market participants when prices fluctuate. For example, when market sentiment is high, investors' pursuit of Bitcoin will cause its price to rise rapidly; on the contrary, when market sentiment is low, the price drop will also be amplified. This price fluctuation mechanism is the charm of the Bitcoin market.

However, in addition to the characteristics of Bitcoin itself, external factors in the market also greatly affect its price fluctuations. Recently, a series of changes in macroeconomic factors have increased investors' attention to Bitcoin. For example, the uncertainty of the global economy and the volatility of traditional financial markets have prompted more and more investors to turn their attention to digital assets such as Bitcoin as a hedge tool. Against this background, the price of Bitcoin has naturally risen.

It cannot be ignored that market sentiment and public opinion also play an important role in this process. Recently, many well-known investors and financial institutions have expressed their optimism about Bitcoin. For example, some large investment funds have begun to include Bitcoin in their investment portfolios, which has undoubtedly injected a shot in the arm to the market. At the same time, the discussion on social media is also rising, and more and more retail investors are participating in Bitcoin transactions. This collective investment enthusiasm often leads to a rapid rise in prices.

However, with the soaring price of Bitcoin, the liquidation phenomenon in the market has become more and more obvious. According to data, at the moment when the price of Bitcoin reached US$7,300, US$90 million of liquidation occurred in the market. Behind this phenomenon, the market's high-leverage trading behavior is reflected. In order to pursue higher returns, many investors often choose leveraged trading, which to a certain extent amplifies the volatility of the market. When prices rise, leveraged investors can achieve higher returns; once prices fall back, the risk of liquidation also increases.

In such a market environment, the psychology of investors is also particularly important. Many investors often have a "fear of missing out" (FOMO) mentality when facing rapid price increases, and then increase their investment efforts. However, this fear often leads to irrational decisions, further exacerbating market volatility. Therefore, it is particularly important for investors to remain calm and rational when facing the market.

Of course, the surge in Bitcoin prices is not without risks. The high volatility of the market means that investors may face huge losses while pursuing returns. Therefore, when participating in Bitcoin transactions, investors must always be vigilant and reasonably control risks. In addition, in-depth analysis of market dynamics and understanding of industry trends will also help investors make more informed decisions.

In general, the phenomenon of Bitcoin prices soaring to $7,300 is not only a reflection of the market supply and demand relationship, but also the result of the combined effect of multiple external factors. In this digital currency market full of opportunities and challenges, investors need to always maintain keen insight and make good use of information tools to remain invincible in the ever-changing market.

As the price of Bitcoin continues to fluctuate, how the market will evolve in the future remains an unknown. However, it is certain that the rise of digital currency will have a profound impact on the traditional financial market. As an emerging asset class, Bitcoin will continue to attract more and more investors. Whether as an investment tool or as part of the future financial system, the value of Bitcoin will be further verified.

In this process, investors should not only pay attention to price fluctuations, but also pay attention to their own investment strategies and risk management. Only on the basis of a full understanding of the market can you find your own investment opportunities in this field full of uncertainty. The future digital currency market will be a stage full of challenges and opportunities, and every participant will write his own story on this stage.

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.

In the mainstream, the price of Bitcoin (BTC) surged from $6,900 to $7,300, with $90 million liquidated on BitMEX and Bitfinex alone. While some traders expected a strong surge in the price of Bitcoin after breaking through the $6,900 resistance level, the sudden surge to $7,300 caught many technical analysts off guard.

What will happen to Bitcoin next?

Bitcoin prices are often vulnerable to large declines, as seen on March 12, when the price of Bitcoin fell from $8,000 to $3,600 that day.

As Bitcoin trading volume is concentrated in the futures contract market, Bitcoin prices tend to experience excessive volatility. According to data from Bitwise Asset Management, the verifiable 24-hour spot trading volume of Bitcoin is estimated to be around $1.5 billion.

In contrast, BitMEX contracts alone traded $2.9 billion in the past 24 hours.

Futures, , Huobi, Bybit and Deribit also have high contract trading volumes for mainstream cryptocurrencies such as Bitcoin and Ethereum.

On futures exchanges, traders typically use leverage ranging from 1x to 125x, essentially trading with borrowed funds. Leveraged trades make the market vulnerable to extreme price swings as they cause long and short contracts to be liquidated in a short period of time.

Before the price of Bitcoin fell, most traders in the cryptocurrency market were long Bitcoin. On BitMEX, Binance Futures, and Bitfinex, about 60% of futures contracts are long positions.

The steady growth in demand for Bitcoin purchases began to weigh on Bitcoin shorts, forcing traders to buy Bitcoin in the market and adjust their positions. Bitcoin prices continued to break through $7,000 and then quickly rushed to $7,300.

BTC-USDT daily chart. Source: TradingView

Popular traders like Flood have previously said that Bitcoin's strong rebound from the $5,900 support level may test higher resistance levels.

If short liquidation is the main reason, isn’t that a re-bearish move?

If the entire move was triggered by a series of short liquidations from the lows, then there is a strong reason to be re-bearish in the short term.

However, since late March, the price of Bitcoin has gradually risen from the low of $6,000, which is mainly driven by growing spot trading volume and demand.

Major cryptocurrency exchange Coinbase said in a report that more and more retail investors bought Bitcoin after the Bitcoin crash to $3,600.

“We usually have 60% more customers buying Bitcoin than selling, but during the crash, this number jumped to 67%,” Coinbase said. “Due to the market trough, customers have shown strong demand for crypto assets even in the face of extreme Bitcoin price volatility.”

A rebound driven by the spot market and short liquidations presents a more optimistic short-term outlook than a price surge driven by the futures market.

The key to maintaining the recent short-term momentum of Bitcoin is that the price of Bitcoin can slowly rise after the rapid rise to $7,300.