Since Dec. xviii, 2022, in less than three months, Bitcoin'southward (BTC) toll surged by 68% against the United States dollar. It surpassed the $10,000 level on February. 9, marking the kickoff of a total-blown crypto market rally for most.

The sentiment around the recent Bitcoin rally remains divided among investors. Joe007, for instance, ane of the biggest whales in the cryptocurrency market, has been determined that the upsurge has been a effect of pure manipulation.

Other investors like Adaptive Capital general partner Willy Woo and Three Arrows Capital CEO Su Zhu said that both fundamental and technical factors accept supported the rally since the offset. When Bitcoin'south toll was hovering at around $7,000, Zhu noted that the premium of the BTC/USDT pair indicated an aggregating stage was starting especially in Asia.

While the explanations for the recent Bitcoin upsurge vary, they ultimately can exist narrowed down to three wide factors: aggregating since December 2022, on-chain data indicating a rise in investor activity and a possible manipulation by whales.

Factor #i: aggregating of Bitcoin since December 2022

On Dec. 28, 2022, Zhu stated that the BTC/USDT premium suggest investors were accumulating, and Bitcoin'south price could hit $ix,000 past the finish of January:

"BTC/USDT premiums and price activity show clear signs of accumulation and coin menstruation back into take a chance. Would not surprise me to meet 9K+ earlier the end of Jan."

At the fourth dimension, Bitcoin'south price was hovering at $7,200, and at the cease of Jan, equally predicted past Zhu, its cost peaked at $9,500. When the BTC/USDT pair was showing a premium over spot, information technology meant that the demand for Tether and Bitcoin was on the rise.

Co-ordinate to cryptocurrency research firm Diar, the majority of the on-chain activeness of Tether in mid-2019 occurred in China. The book of Tether coming from Chinese exchanges was substantially higher than exchanges in the Westward. The study read:

"On-chain data shows Tether movements hitting a new all-fourth dimension-high for 2Q19 with one month left on the agenda for the period. What is almost striking, nonetheless, is the volume coming in and out of Chinese exchanges dwarfs western and global trading venues and accounts for more than half of the total transaction value of known parties."

Based on the premium of the BTC/USDT pair and People's republic of china accounting for the overwhelming majority of Tether's on-chain activeness, it can exist reasonably deduced that many investors in Asia were accumulating in the concluding months of 2022.

The gradual accumulation heading into 2022 was expected to be dominated by the narrative around the scheduled Bitcoin reward halving set to occur in May, established a stiff foundation for an extended rally.

Factor #2: whale manipulation

Since Bitcoin'due south price was in the mid-$ix,000 range, Joe007 has consistently said that the rally is manipulated past fake buy walls and spoof orders. After Bitcoin's cost hit $10,000, the Bitcoin whale wrote:

"I'1000 all in for a practiced old BTC parabolic, but I'd like to cash out in the cease. Simply it'southward not possible if the price is pumped upward by overleveraged players in the face of low liquidity and weak fiat inflow."

The main argument behind Joe007's statement is that the recent upsurge was triggered by other whales placing spoof orders across margin trading platforms to inorganically pump the price of Bitcoin up.

In margin trading, a spoof club is a fake buy order of a large size created to lead others into buying into the market with the intent of pushing the toll up. When the price goes up, the order disappears, hence the term "spoof."

While the Bitcoin rally started out as manipulation from whales, considering the consistency in the emergence of spoof orders every time the ascendant cryptocurrency showed a sign of a pullback, it remains unclear whether the movement to $ten,000 and to a higher place is also being manipulated.

Only put, what began as manipulation tin turn organic if retail investors start to get involved and invest into the market out of fear of missing out. Throughout the entire run from the low $8,000s to $x,000, short sellers continue to place pressure level on the marketplace with large sell orders in the $9,000-to-$10,000 range.

As Bitcoin's cost increased, it squeezed short contracts and pushed short sellers to market buy, which and then turned into ownership demand that farther led BTC to spike. Speaking well-nigh Bitcoin reclaiming the psychological $ten,000 level, a cryptocurrency analyst known equally Light said:

"Markets seek liquidity. In that location are hundreds of millions in stops, liquidations and trigger orders hiding right above it. The prize is too bang-up not to be taken. In that location is no real material sum of spot sellers who waited this long but to sell just before this leg'due south climax."

The lack of fiat inflow has been described as the missing piece of the upside movement of Bitcoin from the $half-dozen,000s to $x,000. But, in the by several days, exchanges like Binance have started to see some inflow that may provide BTC the basis information technology needs to initiate an extended upsurge.

Gene #3: rise on-chain investor activity

Willy Woo, who has created various indicators that take both fundamental and technical factors of Bitcoin into consideration to predict its trends, said that the chance of $10,000 being the top is basically zero. To explain the point, Woo showed a chart with the price of Bitcoin alongside on-chain investor action.

Caption: Bitcoin on-chain investor activity. Source: Willy Woo Twitter

Caption: Bitcoin on-chain investor action. Source: Willy Woo Twitter

The Realised Value to Transaction Volume ratio, for instance, is used equally a bespeak to find market bottoms and tops. When Bitcoin's price reached $14,000 concluding yr, the RVT ratio hit nearly 0.04. As of Feb. 10, the RVT ratio is hovering at around 0.018, which shows Bitcoin'due south cost is unlikely to accept topped. The ratio peaked at 0.12 when Bitcoin'southward toll hit $20,000 in Dec 2022.

Could information technology be a mixture of all three factors?

The Bitcoin'south rally from $6,400 to $10,000 is likely to have begun as manipulation from whales, based on the frequency and the consistency of spoof orders. Still, information technology might have picked up retail interest, especially as investors in Asia began to accumulate Bitcoin in apprehension of the block reward halving that will occur in about 3 months.

Although Bitcoin's cost is currently hovering at effectually $10,100, technical indicators practise non testify overbought conditions nor signs of a local top, which could allow BTC to move up further before it pulls back.