Why the price of Bitcoin is going up
CNBC Business News' Kate Rooney said in a report noting the gains that the world's largest cryptocurrency by market cap has broken higher following a comeback from 10-month lows recorded earlier in the week. The lows were hit earlier in the week.
The recent rise in the value of bitcoin coincides with a weakening of the United States dollar versus a basket of major currencies throughout the world, following a lengthy period of strength. But on Friday, when the dollar index was falling, Bitcoin (BTC/USD) grabbed the hint to continue its upward trend from below $20,000, adding to Thursday's gains.
The CNBC host made the following observation as Bitcoin kicked into high speed while the currency struggled:
In the most recent months, it has demonstrated a heightened sensitivity to increases in the value of the dollar. She made the observation that "you can see that inverse correlation popping up on the chart some time around May." The graphic that she was referring to shows that the price of bitcoin has dropped below $30,000 and is continuing to plummet even as the US dollar has risen in response to the meltdown in the cryptocurrency market.
The robust spike in short liquidations is another aspect that has been at play as Bitcoin (BTC) picks up some negative market rebound recently. According to data provided by Coinglass, almost $343 million worth of cryptocurrency shorts were closed in the past twenty-four to twenty-five hours, making these the largest short liquidations in over a month.
As was reported, Bitcoin's price jumped beyond $21,000 just as Sam Bankman-cryptocurrency Fried's exchange, FTX, disclosed it had bought a 30% interest in SkyBridge Capital. This was today's greatest piece of cryptocurrency-related news. The balance sheet of Anthony Scaramucci's SkyBridge will soon reflect the addition of cryptocurrencies worth a total of $40 million.