Bitcoin price hits $32,000 as rally continues

·2-min read
Digital generated image of Bitcoin sign stock market data on blue background.
Despite bitcoin's rally of nearly 11% in the past week there are obstacles on the horizon that may frustrate the current rising price action. Photo: Getty

Bitcoin (BTC-USD) rallied on Tuesday night to briefly touch $32,200 (£25,596), its biggest daily gain since March, but obstacles persist that could limit its recovery.

The price of the world's preeminent cryptocurrency stood at $31,528 on Wednesday, up nearly 7% in the past week.

Read more: Crypto live prices

Bitcoin broke through the psychological $30,000 level after a surge at the beginning of this week — the current high is its biggest gain since March.

Bitcoin's market cap is now over the $600bn mark and, reflecting this, the global cryptocurrency market is now worth $1.36tn.

The recent upward momentum for the cryptocurrency market as a whole has been attributed, in part, to the gains made by tech stocks since the beginning of the week.

The Nasdaq (^IXIC) closed down slightly to 12,081 points on Tuesday, but the securities exchange made solid gains in the past week.

Bitcoin has tended to correlate with tech stocks, bringing along with it most of the top ten cryptocurrencies.

Watch: What are the risks of investing in cryptocurrency?

Ethereum (ETH-USD) has had a less impressive run, with a price just shy of the psychological $2,000 mark.

The world's second-largest cryptocurrency by market cap was priced at $1,927 at the time of writing, a slip of 2.3% over the week.

Despite bitcoin's rally of nearly 11% in the past week there are obstacles on the horizon that may frustrate the current rising price action.

Supply chain disruptions caused by the war in Ukraine and the legacy of the coronavirus pandemic have caused a spike in the price of fuel and fertiliser.

The combined rise of both of these commodities has contributed to the steady rise of inflation, leading to the current cost of living crisis.

Read more: Crypto: Stablecoin storm spreads after billions of tether is cashed out

The cost of commodities is forecast to rise further as China opens up after weeks of coronavirus lockdowns, which could lead to a spike in the demand for oil.

The insecurities in global markets could see a plunge in investor tolerance for risk and put traders on the defensive.

Institutional money could gravitate away from bitcoin and toward lower risk investments, and retail traders will have less disposable income to speculate on the volatile cryptocurrency market.

Watch: Can you live exclusively off bitcoin?

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