Analysis of the deep reasons behind Bitcoin's rebound

In the past few years, Bitcoin, as an emerging digital currency, has experienced many price fluctuations. From the initial few dollars to tens of thousands of dollars today, the price changes of Bitcoin have attracted global attention. In this upsurge, many investors and analysts began to pay attention to the price trend of Bitcoin, especially after a period of decline. What caused Bitcoin to stop falling and rebound? This article will explore the deep reasons behind this phenomenon from multiple perspectives.

First, changes in market sentiment are an important factor in the recovery of Bitcoin prices. Sentiments play a vital role in financial markets. Both optimistic and pessimistic sentiments can quickly affect investors' decisions. When the market is generally pessimistic about the future of Bitcoin, investors tend to choose to sell, causing prices to fall. However, once market sentiment turns optimistic, investors will re-enter the market and drive prices up. For example, in April 2021, the price of Bitcoin broke through the $60,000 mark, attracting a large influx of new investors. At this time, market sentiment was generally optimistic, and many people believed that Bitcoin would continue to rise, further driving the price rebound.

Secondly, the participation of institutional investors has also played an important supporting role in the price of Bitcoin. In recent years, more and more institutional investors have begun to pay attention to Bitcoin. Companies such as Tesla, Square and MicroStrategy have successively purchased Bitcoin, indicating their recognition of this digital asset. The participation of these institutional investors not only increases the liquidity of the market, but also provides strong support for the price of Bitcoin. For example, Tesla announced the purchase of $1.5 billion worth of Bitcoin in early 2021. This news immediately aroused a warm response from the market and promoted the rapid rise of Bitcoin prices.

In addition, the technological progress of the Bitcoin network is also one of the important reasons for its price recovery. As a decentralized digital currency, the blockchain technology behind Bitcoin continues to develop and improve. For example, the introduction of the Lightning Network has greatly improved the speed and efficiency of Bitcoin transactions and reduced transaction costs. This technological advancement has not only improved the practicality of Bitcoin, but also enhanced investor confidence. As more and more merchants begin to accept Bitcoin payments, more people are willing to hold and use Bitcoin, which has driven its price recovery.

Furthermore, the uncertainty of the global economy has also prompted investors to turn their attention to digital assets such as Bitcoin. After experiencing the impact of the COVID-19 pandemic, the global economic recovery faces many challenges, such as inflation and supply chain issues. In this environment, many investors regard Bitcoin as a "safe haven asset" and hope to hedge the risks brought by traditional assets by investing in Bitcoin. For example, after seeing the Federal Reserve implement loose monetary policies, some investors choose to buy Bitcoin to hedge against possible currency depreciation risks. This demand for Bitcoin has further driven the recovery of its price.

At the same time, changes in regulatory policies are also an important factor affecting the price of Bitcoin. Although Bitcoin faces strict regulation in some countries, it has received positive support in other countries and regions. For example, El Salvador became the first country to use Bitcoin as legal tender in 2021, a move that has attracted widespread attention and discussion around the world. Such positive policies not only enhance the legitimacy of Bitcoin, but also enhance investor confidence, driving the price rebound.

In addition, the supply and demand of Bitcoin also directly affects the changes in its price. The total amount of Bitcoin is limited, and there can only be a maximum of 21 million Bitcoins. This scarcity makes the price of Bitcoin tend to rise rapidly when demand increases. As more and more people begin to pay attention to Bitcoin, the demand in the market continues to increase, which also drives up the price of Bitcoin. For example, in 2021, the demand for Bitcoin surged, causing its price to quickly break through the historical high.

Finally, the influence of social media and online public opinion cannot be ignored. Nowadays, social media has become an important channel for information dissemination, and many investors obtain market information and investment advice through platforms such as Twitter and Reddit. Especially on certain social media platforms, the popularity of Bitcoin often triggers waves of investment crazes. For example, in January 2021, the incident of GameStop stock attracted widespread attention from Reddit users, and many investors began to discuss Bitcoin, driving up its price.

In summary, there are many reasons why Bitcoin stopped falling and rebounded, including changes in market sentiment, participation of institutional investors, technological progress, uncertainty in the global economy, changes in regulatory policies, supply and demand, and the impact of social media. These factors are intertwined and have jointly promoted the recovery of Bitcoin prices. Although the future market trend is still full of uncertainty, it is foreseeable that Bitcoin, as an emerging asset, will continue to attract investors' attention.

In this ever-changing digital currency market, investors need to maintain keen insight and pay attention to market dynamics and policy changes in order to develop more reasonable investment strategies. The future of Bitcoin is still full of possibilities. It is a good idea to find your own investment direction on this road full of challenges and opportunities. Although the price fluctuations of Bitcoin are eye-catching, it is more important that investors have a deep understanding of the intrinsic value and future development potential of this digital asset so as to make more informed decisions.

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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.

To say that Bitcoin has stopped falling, we can first say that the value of Bitcoin has fallen by more than 70% since its all-time high in November last year. The price of Bitcoin has not exceeded $50,000 since December 25, 2021. Despite the ups and downs, the price of Bitcoin has fallen by nearly 70% since its all-time high of more than $68,000 on November 10 due to soaring inflation, lagging job market recovery, and the Federal Reserve constantly signaling that it will begin to gradually reduce pandemic measures to support the economy. Many investors want to know what caused Bitcoin to stop falling? Let the editor of the currency circle analyze it for you.
 What caused Bitcoin to stop falling?
Despite a slow start to the year, Bitcoin is entering 2022 on a relatively high note, with strong performance in November and early December giving way to a recent downtrend. After starting 2021 in the $30,000 range, Bitcoin has been rising throughout the year and set its current all-time high when it surpassed $68,000 on November 10.
Despite the sharp pullback from its latest all-time high, many experts still expect the price of Bitcoin to rise above $100,000 at some point — describing it as a matter of when, not if. Shortly after Bitcoin hit its all-time high in November, Ethereum hit its own all-time high at over $4,850. Ethereum has seen similar volatility following its latest high.
Bitcoin surpassed $60,000 in April 2021, hitting its first new high of the year, and its price action since then has highlighted the volatility of the cryptocurrency as more and more people become interested in getting involved. In the weeks between the July lows below $30,000 and the latest highs in November, Bitcoin fluctuated wildly up and down. The future of cryptocurrency will certainly include more volatility, and experts say that this is all normal.
 Signals that Bitcoin has stopped falling
The stop loss signal is a summary of the operation experience. These are also traces of the currency market transactions, and have a certain role in predicting the future trend. Standard K-line combinations include Dawn Star, two Yang plus one Yin, etc.
First, looking at the K-line, a landmark positive line appears, that is, a positive line that stops the decline. This landmark positive line must be accompanied by trading volume.
Second, from the perspective of the moving average, the 5-day moving average should flatten and then turn upward. It is best if the 5-day moving average golden crosses the 10-day moving average.
Third, judging from the index, there has been no new low for at least three days, and the index closed above the 5-day moving average.
Hopefully, you can understand what caused Bitcoin to stop falling through the above article. It is important to note that Bitcoin has plummeted by more than 52% so far this year and is currently hovering around $21,000 per coin. The most popular cryptocurrency has lost about 70% of its value since hitting an all-time high of about $69,000 last November. The entire crypto market has felt similar pain. The total market value of crypto assets has fallen from a peak of $3 trillion in November 2021 to less than $1 trillion. This is the first time the asset class has been worth less than $1 trillion since 2021, and many other assets are also experiencing volatility that has shaken investors.