Bitcoin price has surpassed the $71,000 mark. In the last 24 hours alone, the price of Bitcoin has risen 6.5%, going from just under US$65,500 to reach US$71,491. This remarkable recovery 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 main reasons behind Bitcoin’s latest price surge.
#1 Influence on the Futures Market
The futures market played a key role in driving up the price of Bitcoin. According to data from Coinglass, in the last 24 hours there were liquidations of 64,480 traders, with total cryptocurrency liquidations totaling US$184 million. Specifically, for Bitcoin, short positions worth US$56.9 million and long positions worth US$16 million were liquidated.
General Byzantino, a crypto analyst, observed the significant increase in open interest, suggesting that leverage has been an important factor in driving the price of Bitcoin higher. He stated: “I can’t help but get the feeling that BTC is trading as if someone knows something. A billion dollars in open interest has been added in the last few hours. I think it was mainly this leverage that pushed us up.”
Furkan Yildirim, another analyst, warned on the sustainability of this recovery, pointing to the more than 1.7 billion dollars in open contracts accumulated since yesterday as a sign of overleveraged positions. “The truth is that more than $1.7 billion in open interest has been accumulated since yesterday. We are increasingly seeing the use of overleveraged positions,” he noted, raising questions about the sustainability of the change.
#2 Bullish news for Bitcoin
The recovery was further driven 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 doors to professional investors in Europe and signifies growing institutional acceptance.
Additionally, Peruvian Nilam Resources news expressing intention purchasing 24,800 Bitcoins (worth $1.7 billion) “at a discount rate relative to current market prices” through an acquisition strategy involving MindWave, a special purpose entity, injected a dose of joy and skepticism in the market given Nilam’s OTC microcap stock status.
#3 Bitcoin ETFs and Coinbase Premium
Another critical factor that influenced the rise in Bitcoin prices was the dynamics surrounding Bitcoin ETFs and the Coinbase Prize. The Coinbase Premium Gap turned positive again yesterday, as noted by CryptoQuant analyst Maartunn, indicating 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 that of Coinbase approximately 90% custody of Bitcoin ETF assets, the premium emerges as a key indicator of institutional demand for Bitcoin. This was further evidenced by yesterday’s positive net ETF inflows totaling $15.4 million, after last week saw five consecutive days of net outflows.
GBTC in grayscale had US$350 million in outflows. Meanwhile, Fidelity’s FBTC began picking up last week’s slack with inflows of $261.8 million. Blackrock had another weak day, with just $35 million in inflows. However, the Coinbase premium was once again a good indicator.
Yesterday’s ETF flows were positive once again after a negative week of $15.4 million.$GBTC had US$350 million in outflows. Fidelity began to make up for last week’s slack, with inflows of US$261.8 million.
Blackrock only made $35 million.The price went from US$65,000 to more than US$70,000. One day… pic.twitter.com/HCNwa7L2p8
– WhalePanda (@WhalePanda) March 26, 2024
#4: Technical Summary
From a technical perspective, Bitcoin price’s breakout of 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) confirmed the legitimacy of the breakout, leading to an increase of more than 7% in the price of Bitcoin. This technical movement reinforced the confidence of both traders and investors, contributing to the momentum that took the price above the US$70,000 threshold.
Featured image created with DALL·E, chart from TradingView.com
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