The price of rose above $1,700 Tuesday morning, according to a price index by industry website Coindesk.

With the price so high, analysts are contemplating what risks could scuttle its recent surge.

The digital currency has been rallying significantly in recent weeks. Over one month, the price has increased by 43 percent, according to Coindesk figures. Over one year, the market capitalization for bitcoin has increased massively, from around $7.16 billion in May 2016 to $27.9 billion today. In just the last 24 hours its market capitalization has risen by over $1 billion, according to the website's price index.

While the price rises, cryptocurrency investors are also becoming more confident. The number of "long" bitcoin positions held — where investors speculate that it will rise in price — has increased from a low of 7,649 on April 29 to 15,279 on Tuesday, according to data from bitcoin exchange Bitfinex. Over the same period, short positions held have remained fairly consistent at around 17,000.

Recent developments in bitcoin are continuing to sustain the rally. Japan's decision to legalize the currency as a payment method has led to a spike in popularity and a greater amount of bitcoin being bought with Japanese yen. Supply and demand dynamics are also having a large impact on the digital currency, according to Chris Burniske, a blockchain products lead analyst at fund manager ARK Invest.