The Bitcoin Rally Is Far From Over: 2 Key Factors Behind The Momentum
16 Februar 2024 - 1:00PM
NEWSBTC
Bitcoin has been the buzz of the town lately as it continues to
push past key price levels, leaving many to wonder how high it can
go. Current technicals and fundamentals indicate that the latest
rally has solid foundations, and there are good reasons to think
there’s more upside ahead for the leading cryptocurrency. Related
Reading: Bitcoin ETFs Boosts Coinbase (COIN) Shares As JPMorgan
Upgrades Rating The latest rally has been fueled by different
on-chain sentiments ranging from whale accumulation to the increase
in Bitcoin whales. Two of the most important market factors fueling
this rally are spot Bitcoin exchange-traded funds (ETFs) and the
increase in CME margins, according to analysts at QCP Capital, a
crypto asset trading firm. Strong Inflows Into Spot Bitcoin ETFs
Driving Demand Most of Bitcoin’s price action since October 2023
has been centered around spot Bitcoin ETFs, giving investors an
easy way to gain exposure to the leading cryptocurrency. Notably,
the price of BTC has doubled since BlackRock’s first filing for a
spot Bitcoin ETF. The first day of trading for these ETFs broke
trading volume records, with $4.6 billion worth of shares being
traded. Analysts at QCP Capital noted that the inflows started to
flip positive towards the end of January after a week of major
outflows from Grayscale’s Bitcoin Trust GBTC. Things seem to have
settled, and the total inflows into these have now even eclipsed
the once-dominant ProShares BTC futures ETF. Analysts at the
trading firm also noted the current increase in CME margin
requirement as a signal of continued BTC price growth. Notably, the
increase in this CME margin across various exchanges resulted in
widespread short covering Lunar New Year weekend. Consequently, the
spot price for BTC and forward spreads surged. Spreads are now
around 11-12%, indicating a strong bullish sentiment as traders are
willing to pay higher premiums. Another market factor contributing
to the surge was the sell-and-buy-the-dip that played out after the
latest consumer price index (CPI) report came out higher than
expected. Headline CPI was 3.1% actual compared to 2.9% expected,
and Core CPI was 3.9% actual compared to 3.7% expected, leading to
a minor sell-off of risky assets, which was short-lived. Bullish
BTC Momentum Set To Continue The rally in Bitcoin is showing no
signs of slowing down, and investors are starting to accumulate
with a Fear Of Missing Out. Recent on-chain data shows that Bitcoin
whales have purchased over 100,000 BTC worth $5 billion in the past
five days. The number of whales holding more than 1,000 BTC now
stands at 2,121, an increase of 74 new wallets in February. Related
Reading: Bitcoin To Receive Monumental $150 Billion Inflow: Expert
Reveals In a recent CNBC interview, Ric Edelman, founder of the
Digital Assets Council of Financial Professionals, predicted this
inflow into spot Bitcoin ETFs would continue over the next two
years and reach $150 billion by the end of 2025. Interest in
Bitcoin will increase as more institutional investors get on board,
cementing Bitcoin as an asset class amongst traditional investors.
Cover image from Dall-E, chart from Tradingview
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