In the early hours of Monday in the US, bitcoin witnessed a significant surge, with its price rising above the $72,000 mark. The rise, marked by a rise of more than 4.5% in just five hours from below $69,500 to an intraday high of $72,579, can be attributed to a confluence of factors that have roiled the cryptocurrency market.
#1 Strong bitcoin Spot Demand
The rally appears to be driven by strong demand in the bitcoin spot market, suggesting the possible sustainability of the move. crypto Analyst Daan crypto Trades (@DaanCrypto) twitter.com/DaanCrypto/status/1777253799414890891″ target=”_blank” rel=”nofollow”>noted healthy market dynamics, stating in x: “Funding rates still appear strong. Healthy reset, price is slowly rising. That's what we want and how we want to maintain it. If the longs start running again while spot bidding stops, that will end up in another color at some point. So far so good.”
Along with the increase in spot prices, data from Coinglass reveals that $40.7 million worth of btc shorts were liquidated today, further driving the price higher.
#2 btc Halving
The imminence of the next bitcoin halving, scheduled for about 12 days from now on April 20, has likely also played a pivotal role. Historically, bitcoin has seen a price pullback before the halving followed by a significant rally before the event.
The halving will reduce the bitcoin reward from approximately 900 coins per day to 450 coins. Skybridge Capital's Anthony Scaramucci recently shared his thoughts with CNBC, highlighting the priceless nature of the upcoming halving and the potential for it to drive the price of bitcoin even higher.
“Now they say the halving is already included in the price. I don't believe it. I think bitcoin has a lot more to do here,” he stated. At current prices, it takes approximately $65 million in bitcoin ETF inflows per day to purchase the daily mined supply. In two and a half weeks, that's only $32.5 million.
#3 btc follows gold
The correlation between bitcoin and gold, both considered safe haven assets, is another factor contributing to bitcoin's price movement. Gold's strong opening this week, reaching a new all-time high of $2,253, has been reflected in the trajectory of bitcoin's price. Gold enthusiast Peter Schiff and cryptocurrency analyst Michaël van de Poppe have highlighted the positive correlation between the two assets, suggesting shared momentum amid economic uncertainties.
The Gold Bug Peter Schiff twitter.com/PeterSchiff/status/1777167864367133160″ target=”_blank” rel=”nofollow”>commented via x: “It's been a volatile Sunday night for gold. After an initial sell-off of $27, it rebounded over $45, reaching a new all-time high above $2,348. This is an early stage of a major gold price revision to reflect much higher future inflation. “It is a warning that monetary policy is too loose.”
The cryptanalyst Michaël van de Poppe twitter.com/CryptoMichNL/status/1777248861901189146″ target=”_blank” rel=”nofollow”>commented: “Here we go. Gold opens with a new big bullish candle and bitcoin returns to $71,000. Given the strength of commodities and the current bitcoin price action, I suspect we will see a test of the all-time high in the future ”.
#4 Strong weekly close
The importance of bitcoin's weekly candle close was highlighted by CRG, a renowned analyst, who pointed to it as a contributing factor to the rally. bitcoin price's ability to sustainably close above its 2021 high for the second consecutive week indicates strong bullish sentiment in the market.
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Great weekly closing
New all-time highs this week
Source: my plums pic.twitter.com/wyxwomdDjZ
— CRG (@MacroCRG) twitter.com/MacroCRG/status/1777126529111052341?ref_src=twsrc%5Etfw” rel=”nofollow”>April 8, 2024
#5 Hong Kong prepares for spot ETF launch
Finally, anticipation of the launch of spot bitcoin ETFs in Hong Kong may have injected optimism into the market. twitter.com/BTC_Archive/status/1777279990582616572″ target=”_blank” rel=”nofollow”>Reports indicate that major Chinese asset managers such as Harvest Fund and Southern Fund, which manage assets worth more than $230 billion and $280 billion, respectively, are positioning themselves through Hong Kong subsidiaries to enter the market. bitcoin ETF market, awaiting regulatory approval.
#6 Extra: The “Ethena Effect”
Ethena Labs has begun purchasing btc as part of a cash-and-carry exchange to create a “safer” USDe synthetic dollar product for users. The move is being watched critically by the crypto community.
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Ethena now holds over 500 million in btc covered on Binance, OKX and Deribit
Ready for halving ₿ pic.twitter.com/auquK59DfY
— Seraphim (@MacroMate8) twitter.com/MacroMate8/status/1777277989866111476?ref_src=twsrc%5Etfw” rel=”nofollow”>April 8, 2024
At the time of publication, btc was trading at $72,103.
Featured image created with DALL·E, chart from TradingView.com
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