The Real Reasons Why Bitcoin Skyrocketed by $7K Daily: But Can the Rally Last?

The record inflows into the spot BTC ETFs were just a part of the overall price gain puzzle.

Despite all the negative macro and industry developments that took place in the past week, bitcoin’s price went on an impressive run on Monday morning, surging to a new eight-month high of just over $87,000.

Here are some of the possible reasons behind this, but let’s start with why it was unexpected.

The Bad News

It was just a week ago that the US Senate was set to vote on advancing the key crypto market structure bill, the CLARITY Act. Without much fight, the Republicans lost the vote, and the legislation faced another major setback, although many experts believe this is not the end of it.

A day later, the situation for risk-on assets like BTC worsened when the US Federal Reserve hiked interest rates for the first time in over three years. Bitcoin’s price reacted with immediate declines, slipping to a three-week low of $75,000 on a couple of occasions.

However, the bulls showed resilience the following days and initiated a more impressive leg up on Friday. Although the Bank of Japan followed the Fed’s example, BTC rallied to just over $80,000. It climbed to $82,000 on Saturday, but another set of negative macro developments — escalating tension in the Middle East as well as more violent attacks exchanged by Ukraine and Russia — led to a brief correction to $80,300.