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Bitcoin surged to unprecedented heights on Tuesday, surpassing the $73,000 mark for the first time in its history.
This surge marked yet another milestone in the cryptocurrency's volatile journey.
According to data provided by crypto exchange Coinbase, Bitcoin's price soared to $73,027 on Tuesday morning, eclipsing the previous record of $72,702 set just a day earlier. Last week, Bitcoin broke its all-time high, exceeding $69,000 on Tuesday.
Volatility Persists as Bitcoin Faces Corrections
However, the euphoria surrounding Bitcoin's latest milestone was short-lived as the cryptocurrency swiftly retreated from its peak. Within a short span, Bitcoin's price plummeted to $68,603, as reported by Coinbase. Nonetheless, demonstrating its characteristic volatility, Bitcoin rebounded, climbing back to $71,102 at the time of this report.
The pattern of Bitcoin reaching new highs only to face immediate corrections has become a familiar occurrence in recent times. A rapid downturn often follows each surge to a new peak, as some investors capitalize on the peak prices. Yet, despite these fluctuations, Bitcoin has exhibited remarkable resilience, boasting a 47% increase in value over the past month, according to data from CoinGecko.
Factors Driving Bitcoin's Momentum
The surge in Bitcoin's price has been fueled by several factors, including the growing demand for spot Bitcoin exchange-traded funds (ETFs). These ETFs, approved in January, allow investors to trade Bitcoin shares akin to stocks, thereby bolstering interest in the cryptocurrency market. Consequently, billions of dollars have flowed into Bitcoin-backed funds, contributing to its upward trajectory.
According to Decrypt, Bitcoin's recent price surge has coincided with anticipation surrounding the upcoming halving event scheduled for next month. This event, occurring roughly every four years, entails a reduction in the rewards granted to Bitcoin miners by half. As a result, the growth of Bitcoin's circulating supply slows down, leading to a potential scarcity that could drive prices higher.
A Crypto News report says these trends will be crucial as the leading cryptocurrency approaches its fourth halving next month. Should the existing demand ratio continue, the imminent reduction in BTC's supply post-halving could significantly affect its prices.
However, the broader cryptocurrency market has witnessed significant liquidations amidst Bitcoin's price fluctuations. Over the past 24 hours, liquidations of crypto positions amounted to $356 million, with Bitcoin alone accounting for over $100 million, according to data from CoinGlass.
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