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Bitcoin reached $39,000 for the first time in nearly six weeks

Bitcoin reached $39,000 for the first time in nearly six weeks

July 27, 2021: -Bitcoin increased above $39,000 for the first time since June as sentiment turned bullish after a recent sell-off.

The cryptocurrency was trading at nearly $38,567 at 7:10 a.m. on Monday, according to CoinDesk data, up around 12% in the previous 24 hours. Bitcoin had earlier increased nearly 12% hit a 24-hour high of $39,544, the highest level from June 16.

Bitcoin’s rally released other cryptocurrencies with ether up 8.7% at $2,345. The entire cryptocurrency market added above 100 billion in value in 24 hours, according to data from Coinmarketcap.com.

The rally comes after bitcoin recently came down less than 30,000 after a global sell-off in stocks, sparking fears that it could increase even further.

“I think we saw an accumulation period around 29-30K, which indicates the bullishness and a potential move to $40K for Bitcoin,” said Vijay Ayyar, head of business development at cryptocurrency exchange Luno.

Twitter CEO Jack Dorsey, Tesla CEO Elon Musk, and ARK Invest CEO Cathie Wood recently spoke during a watched bitcoin conference called “The B-Word.”

Musk said that Tesla would likely start accepting bitcoin for vehicle purchases again as a more significant share of bitcoin mining switches to renewable energy. Tesla suspended vehicle purchases that used the cryptocurrency out of concern over the “rapidly increasing use of fossil fuels for bitcoin mining in May.”

Mining is the energy-intensive process of creating new coins, which involves solving complex math problems. The computational power required to do so also consumes a lot of energy.

“The Chinese trading day has opened up, and the Elon/Jack/Cathie talk was super bullish,” said Alex Brammer of Luxor Mining, a cryptocurrency pool built for advanced miners.

There have been other bullish headlines for bitcoin. E-commerce giant Amazon is looking to add a digital currency and blockchain expert to its payments team, suggesting it could be taking a closer look at bitcoin and other cryptocurrencies. An Amazon spokesperson said that the company is “inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon.”

These bullish moves have also contributed to a so-called “short squeeze,” according to bitcoin mining engineer Brandon Arvanaghi.

Investors who short bitcoin are betting that the price will decrease further. But if the price goes higher, these investors look to cut losses and exit their short positions, helping to push the price even higher.

“I think over-leverage shorts probably drove the extent of the jump,” Luno’s Ayyar said.

However, some of the issues that have weighed on bitcoin’s price have begun to clear up. Over the last few months, China has renewed its crackdown on cryptocurrencies targeting mining and trading. And concerns over the carbon footprint of bitcoin mining are starting to wane.

Luxor Mining’s Brammer said the uncertainty around the environmental impact of mining and the Chinese regulatory concerns have “worn off.”

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