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The price of Bitcoin (BTC) experienced extreme trading fluctuations on Tuesday, briefly surpassing previous all-time highs of over $73,000 shortly after the release of unexpectedly high US inflation data, before swiftly declining into the $68,000 range.
Since then, BTC has rebounded more than 3.5% from earlier session lows to reach $71,000, with the dramatic $4,500 price movement resulting in the liquidation of leveraged positions exceeding $100 million, according to coinglass.com.
The robust recovery of Bitcoin from intra-day lows below $70,000 is likely to strengthen the confidence of bullish traders, who remain firmly in control.
Bitcoin has risen 12.7% over the past week and 42% in the last 30 days, as reported by CoinMarketCap.
This upward movement has been fueled by a combination of positive fundamentals.
Factors contributing to this include significant ongoing inflows into the newly launched spot Bitcoin ETFs and the fear of missing out (FOMO) as Bitcoin approaches its quadrennial halving event.
Spot ETF trading volumes reached nearly $7 billion on Monday, according to data from The Block.
Last week, the average daily volumes exceeded $6.5 billion.
This marks an increase of more than six times compared to early February, when daily volumes averaged around $1 billion.
Surging demand for spot Bitcoin ETFs has powered the price higher. Source: The Block
Where Next for the Bitcoin Price?
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Although the latest unexpectedly high US inflation data has tempered expectations for Federal Reserve rate cuts, with the CME Fed Watch Tool indicating that money markets now assign a 32% probability of no rate cuts by June (up from 28% on Monday), analysts do not foresee a lasting effect on the ongoing bull market.
“There is too much bullish momentum in crypto,” stated Nansen analyst Aurelie Barthere in a research note.
“We do not anticipate a significant sell-off in crypto as this repricing has occurred over the past few months without undermining the bull market.”
The rate at which new BTC tokens are generated for network validators (or miners) is set to halve next month.
With the impending supply shock from the halving combined with a substantial influx of new demand from the ETFs, the risks for Bitcoin’s price appear to be heavily skewed to the upside.
While short-term setbacks are possible, Bitcoin is currently in a phase of price discovery as it approaches all-time highs.
In such situations, investors often concentrate on significant round numbers as their price objectives.
$100,000 is one such target that the market is likely to focus on.
Can the Bitcoin price hit $100,000 ahead of the April halving? Source: TradingView
There remains a possibility that Bitcoin could surge ahead of the April halving.
The post Bitcoin Price Holds Above $70,000 Level Following Violent $4,500 Price Swing – Where Next for BTC? appeared first on Cryptonews.
