What You Need to Know About Bitcoin's Market Phase

What You Need to Know About Bitcoin's Market Phase

Bitcoin is a renowned cryptocurrency that caught the attention of the public when it entered the last bull market phase, which has had tremendous success overall because the price has exceeded $60,000 by 2021. This yielded a lot of great results for the investors in the crypto community and attracted attention from famous companies such as Tesla, Microsoft, Square, and many others who decided to accept crypto payments and support the mainstream adoption of cryptocurrencies in general. 

But, as Bitcoin is a digital currency that is not regulated as traditional currencies, it is known for its volatile nature, which means a Bitcoin enters a bull and bear market phases based on several factors. In this article, we will review some of the main factors that are responsible for the position of virtual currency in the crypto market.   

Main Factors  

Bitcoin's last market phase is impacted by different factors, but mainly each cycle is based on the interaction between supply and demand. The market supply and demand are not regulated by any institution because Bitcoin was designed as a decentralized cryptocurrency. This means that at the blockchain network, there is a stable rate at which new BTC is distributed and created.  

The miners on the network receive a block reward for their effort to process Bitcoin transactions, validate them and add them to the blockchain system. The block reward is cut in half every four years or after 210,000 blocks are included in the system. This means that the supply of BTC is consistently halved after each Bitcoin halving. Each bull market phase is known for promoting Bitcoin's bull market phase because the supply is decreasing, while the demand for Bitcoin over the years has seen a huge rise. Actually, there was a spike in the popularity of BTC during the last years and after its bull runs.  

Another permanent factor that impacts the supply of Bitcoin is the restricted number of Bitcoin tokens of 21 million. This was created in order to make Bitcoin a deflationary cryptocurrency, and by 2021, about 80% of the total supply of BTC was mined.   

Online Trading   

Today there are numerous automated trading sites like Bitcoin Trader that are known for facilitating automatically online trading based on certain guidelines. More specifically, the sytem is based on blockchain and AI technology in order to apply a High-Frequency Trading trading strategy. It is also beneficial that you can potentially earn daily returns of up to 60%, while the minimum deposit for trading here is $250.   

Otherwise, online trading sites are the marketplace where a consensus regarding the Bitcoin price is reached because, as we said, this is a decentralized cryptocurrency, and also it is one of the resources we have regarding the data about different market cycles of Bitcoin. This allows experts to make comparisons between different bull cycles and find out what are the factors that helped Bitcoin.

Institutional Demand  

One of the most important factors that made Bitcoin an attractive cryptocurrency for the public is the demand from institutional investors that wanted to purchase a large quantity of BTC. This, coupled with the fact that the overall supply is limited and the crypto market is still small and in development, meant that every large purchase had a tremendous impact on the overall value of BTC. 

So, when Elon Musk made the famous decision to make an investment of $1.5 billion in BTC from its company Tesla, this immediately had a great effect on Bitcoin's bull cycle, and it fuelled the rise of the price to over $60,000.  

In conclusion, Bitcoin is a cryptocurrency that is affected by how the supply and demand respond to certain events on the market. Also, the design of the blockchain network makes Bitcoin a scarce asset, and that further prolongs the bull cycle of the cryptocurrency.