On Wednesday, February 28, 2024, Bitcoin surpassed $60,000 for the first time in more than three years.. The last time BTC climbed this high was November 2021. From February 26 to 28, the first cryptocurrency grew by 20%, reaching the threshold of $64,000. What will happen after the correction has begun?
Inflow of money into ETFs
Spot exchange-traded funds for Bitcoin were initially highly anticipated by everyone, and based on these expectations, the value of the first cryptocurrency by capitalization grew. Then the approval by American officials and the launch happened. And, in fact, the correction lasted a month. But now there is a new round of activity: almost every day more and more new cash flows are pouring into ETFs.
In the week that began February 26, the daily cash inflow into spot Bitcoin ETFs has already exceeded $500 million. According to the cryptocurrency trading platform Bitmex Research, on Monday the figure was $520 million, and on Tuesday it was even higher – $577 million.
The most successful is BlackRock's exchange-traded fund called iShares Bitcoin ETF (IBIT). On February 27, the influx of funds into it alone amounted to $520 million, which became a record. IBIT's intraday trading volume reached $1.3 billion, which is comparable to the largest US companies by capitalization.
Perhaps someone will have a question: how is it that the total inflow into spot ETFs is $576 million, and into one iShares Bitcoin ETF $520 million, is this possible? Yes! IBIT Really Takes the Most Money of All ETFs. In addition, it is worth mentioning: shareholders continue to leave the competing fund launched by Grayscale. On February 27 alone, almost $126 million was seized from there..
Actually, the rapid activity of ETFs spurred investors to buy BTC.
Short liquidation
An important reason for Bitcoin's growth may be the increased number of liquidations.. If on February 25 their total number was $13.78 million, then starting from January 26 the figure has steadily exceeded $100 million (February 28 has not yet passed, but the day is not over yet).
The ratio of long liquidations to short ones is interesting. The latter mainly predominate. On February 26, the volume of liquidations of short positions turned out to be more than eight times greater than long positions ($97.63 million versus $11.93 million). February 27 doubled ($95.02 million versus $45.48 million). And on February 28, more than seven times in an incomplete day ($74.9 million versus $10.23 million). This information is provided by the Coinglass portal.
Source: coinglass.com
What could this mean? That everyone who was short could reorient from bears to bulls. In any case, what is happening with Bitcoin now fits into the explanation.
Extreme Greed
The fear and greed index reached 82. This signals that Bitcoin investors are experiencing extreme greed. The last time the index soared so high was October 20, 2021. The greed indicator was even higher even earlier – in February 2021.
Well, greed is greed, but investors are more interested in: what will happen next and when Bitcoin will break through its all-time high.
All-time high
In some countries, BTC is already trading against the local currency at record levels (we are not talking about dollar value, but in absolute values of local currencies). If last week it was mainly African countries, now the trend has also captured Asia. Bitcoin hits all-time high in Chinese Yuan and South Korean Won.
Looks like we just have to wait for the dollar. The question is when?
Technical analysis
The historical maximum of $69,000 (data from the Bitstamp exchange) remained the only visible target — the resistance level for BTC. All the rest have already been completed. If we proceed strictly from the dynamics of the last three days (from February 26 to 28, 2024), then Bitcoin could surpass its all-time high this week.
A bold opinion was expressed by Adam Back, CEO of blockchain technology development company Blockstream.. He expects $100,000 in the next 51 days before the halving.
If technical analysis is to be believed, this does not look incredible.. All major indicators show bullish dynamics. The price is above the 50-week (marked in blue) and 200-week (marked in orange) moving averages. This indicates a long-term bullish trend. If a rollback does occur, then the support level should be around $48,000.
Source: tradingview.com
If we take into account past dynamics, then Bitcoin is generally characterized by short periods of rapid growth in value. In recent years, periods when Bitcoin has surpassed all-time highs have occurred at an equally rapid pace.. Which, among other things, explains the high volatility of the main digital asset. From a fundamental point of view, the upcoming halving adds optimism to holders, of course..
Conclusion
The main catalysts for Bitcoin's rise above $60,000 were the influx of large amounts of money into spot ETFs and exponentially increased liquidations of short positions.. In many countries, BTC has already set historical highs against local currencies. Now investors are waiting for a significant event to happen with the US dollar.
This material and the information contained herein do not constitute individual or other investment advice. The opinion of the editors may not coincide with the opinions of the author, analytical portals and experts.