The Bitcoin (BTC) toll has increased past two-fold in less than a month, surging from $3,600 to over $vii,350. While traders believe a combination of many factors caused the upsurge, there are iii main factors that likely contributed to it.

The 3 factors are a significant surge in spot buys, a massively overextended plunge beneath $iv,000, and the firsthand recovery of BTC to major support levels.

Factor 1: Bitcoin spot buys on the ascension

Coinbase, Kraken, Binance, Bitfinex and other spot exchanges saw a substantial fasten in purchase volume following the March 13 driblet that led BTC to drib from $8,000 to $3,600 within a 24-hour bridge.

Simultaneously, open involvement—a term used to describe the total number of long and brusk contracts open up at a given fourth dimension—plunged across major futures exchanges including BitMEX, Binance Futures, and OKEx.

Bitcoin Futures-Aggregated Open Interest. Source: Coinbase, Skew

Bitcoin Futures-Aggregated Open up Interest. Source: Coinbase, Skew

The abrupt decline in open involvement on futures exchanges and the articulate increase in spot buy volume essentially led to a shift in the market. The spot exchange market began to control the cost tendency of Bitcoin, rather than the futures market.

The futures market oftentimes causes extreme volatility in the Bitcoin price because traders utilize leverage (borrowed funds) to merchandise cryptocurrencies, whereas in the spot market, investors are selling and ownership Bitcoin without borrowed capital.

The shift stabilized the market, allowing the Bitcoin price to recover without astringent pullbacks and with relatively low volatility.

Factor 2: BTC should accept never dropped below $four,000 in the first identify

On March 31, Coinbase released a blog post detailing the trend in the marketplace after the Bitcoin crash to $iii,600.

The exchange said that most users on the platform bought Bitcoin following the abrupt drop, calculation that the pour of liquidations caused BTC to drop much lower on futures exchanges than spot exchanges.

Coinbase explained:

"Cascading liquidations were well-nigh prominent on BitMEX, which offers highly leveraged products. Amidst the selloff, a Bitcoin on BitMEX was trading well below that of other exchanges. It wasn't until BitMEX went down for maintenance at peak volatility (citing a DDoS attack) that the cascading liquidations were paused, and the price promptly rebounded. When the grit settled, Bitcoin had briefly spiked below $4000 and was trading around the mid $5000s."

This opens upward the theory that Bitcoin should have never dropped to the $iii,000s in the first place, which explains the rapid Five-shape recovery to $seven,350.

Factor three: Fast recovery to key support levels

Since early 2022, the $5,800 level has acted as a historically of import support area. It kept the price from falling to the $iii,000 to $four,000 range with the exception of December 2022.

The Bitcoin price recovered from the mid-$3,000 region to $five,800 rapidly, within 7 days. The $v,800 level acted as a strong floor later existence tested three times in March, enabling Bitcoin to see an extended rally.

Several high-profile traders take said that after the breach of $7,300, the $seven,700 resistance level is probable to be the next area for Bitcoin to visit in the near-term.