The Bitcoin price has soared past the $71,000 mark. In the past 24 hours alone, the price of Bitcoin surged by 6.5%, climbing from just below $65,500 to reach $71,491. This remarkable rally can be attributed to a combination of factors that have collectively contributed to the upward trajectory of the world’s leading cryptocurrency. Here’s a closer look at the four key reasons behind Bitcoin’s latest price surge.
The futures market has played a pivotal role in driving Bitcoin’s price upwards. According to data from Coinglass, the past 24 hours have seen the liquidation of 64,480 traders, with total crypto liquidations amounting to $184 million. Specifically, for Bitcoin, shorts worth $56.9 million and longs worth $16 million were liquidated.
Byzantine General, a crypto analyst, noted the significant increase in open interest, suggesting that leverage has been a major factor propelling Bitcoin’s price higher. He stated, “I can’t help but have the feeling that BTC is trading like someone knows something. A billion $ in open interest got added in the past couple hours. It’s mostly this leverage that pushed us higher I think.”
Furkan Yildirim, another analyst, cautioned about the sustainability of this rally, pointing out the over $1.7 billion in open interest built up since yesterday as a sign of overleveraged positions. “The whole truth is that over $1.7 billion in open interest has been built up since yesterday. We are increasingly seeing the use of overleveraged positions again,” he remarked, raising questions of the sustainability of the move.
The rally was further propelled by a series of optimistic news. Notably, the London Stock Exchange (LSE) announced its plan to introduce a market for Bitcoin (BTC) and Ether (ETH) exchange-traded notes (ETNs) by May 28. This decision opens the door to professional investors in Europe and signifies the growing institutional acceptance.
Moreover, the news of Peruvian Nilam Resources expressing intent to purchase 24,800 Bitcoins (worth $1.7 billion) “at a discounted rate relative to current market prices” through an acquisition strategy involving MindWave, a special purpose entity, has injected a dose of exhilaration and skepticism into the market, given Nilam’s microcap OTC stock status.
Another critical factor influencing Bitcoin’s price rally was the dynamics surrounding Bitcoin ETFs and the Coinbase premium. The Coinbase Premium Gap turned positive again yesterday, as observed by CryptoQuant analyst Maartunn, indicating a robust demand for spot Bitcoin ETFs.
Guess who's back? Bitcoin: Coinbase Premium Gap is positive again
https://t.co/0C7YyyFe2T pic.twitter.com/b73XbSygbl
— Maartunn (@JA_Maartun) March 25, 2024
Given Coinbase’s custodianship of approximately 90% of Bitcoin ETF assets, the premium emerges as a pivotal indicator of institutional demand for Bitcoin. This was further evidenced by the positive ETF net inflows yesterday, amounting to $15.4 million after last week saw five consecutive days of net outflows.
Grayscale’s GBTC had $350 million in outflows. Meanwhile, Fidelity’s FBTC started picking up last week’s slack with $261.8 million in inflows. Blackrock had another weak day with only $35 million in inflows. Nonetheless, the Coinbase premium was once again a good indicator.
Yesterday's ETF flows were positive once again after a negative week for $15.4 million.$GBTC had $350 million in outflows. Fidelity started picking up last week's slack with $261.8 million in inflows.
Blackrock only did $35 million.
Price moved from $65k to above $70k. A day… pic.twitter.com/HCNwa7L2p8
— WhalePanda (@WhalePanda) March 26, 2024
From a technical perspective, Bitcoin’s price breakout from a descending parallel trend channel on the 4-hour chart marked a crucial turning point. The successful retest of the strong resistance zone (red zone) has confirmed the breakout’s legitimacy, leading to a more than 7% increase in Bitcoin’s price. This technical movement has bolstered the confidence of traders and investors alike, contributing to the momentum that has driven the price past the $70,000 threshold.
Jake Simmons, a dedicated crypto journalist, has nurtured an unwavering passion for Bitcoin since 2016. Delving deep into the crypto world daily, he disseminates his profound insights and expertise to readers and the wider community. Jake is a firm believer in Bitcoin’s transformative power over the conventional fiat currency system. Holding a degree in Business Informatics, Jake has been entrenched in the blockchain and crypto professionally since his graduation in 2017. Engage with his latest takes on Twitter: @realJakeSimmons.
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© 2024 NewsBTC. All Rights Reserved.
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