Bitcoin’s price experienced intense volatility on Tuesday, reaching new record highs above $73,000 before dropping to the $68,000 range. However, it has since made a strong recovery, currently sitting above $70,000. This significant $4,500 price swing resulted in leverage traders losing over $100 million, as reported by coinglass.com. Despite this turbulent movement, the bullish sentiment remains strong, with Bitcoin up 12.7% in the last seven days and 42% in the past month.
Driving this upward trend are several factors, including substantial inflows into recently launched spot Bitcoin ETFs and the anticipation of Bitcoin’s upcoming halving event. Spot ETF trading volumes have skyrocketed, reaching close to $7 billion, a substantial increase from early February when daily volumes averaged around $1 billion. The surge in demand for these ETFs has had a positive impact on Bitcoin’s price.
While US inflation data has pushed back expectations for a rate cut by the Federal Reserve, analysts do not believe this will have a lasting impact on the current bull market. The momentum in the crypto market is seen as too strong for a significant sell-off. Moreover, the upcoming halving event, which will reduce the issuance of new Bitcoin tokens, combined with the influx of demand from ETFs, suggests that Bitcoin’s price is more likely to continue moving upwards.
While there may be short-term setbacks, Bitcoin is currently in a phase of price discovery as it reaches new all-time highs. In such scenarios, market participants often focus on major round numbers as price targets, and $100,000 is a level that is likely to capture attention in the market. Some analysts believe there is a chance for Bitcoin to rally towards this level before the April halving event.
Overall, the Bitcoin price remains in a bullish trajectory, with strong support from robust market fundamentals and increasing demand from institutional investors through spot ETFs.