Bitcoin Price Surges Past $71,000: 4 Key Reasons Behind The Rally
March 26 2024 - 4:05AM
NEWSBTC
The Bitcoin price has soared past the $71,000 mark. In the past 24
hours alone, the price of Bitcoin surged by 6.5%, climbing from
just below $65,500 to reach $71,491. This remarkable rally can be
attributed to a combination of factors that have collectively
contributed to the upward trajectory of the world’s leading
cryptocurrency. Here’s a closer look at the four key reasons behind
Bitcoin’s latest price surge. #1 Futures Market Influence The
futures market has played a pivotal role in driving Bitcoin’s price
upwards. According to data from Coinglass, the past 24 hours have
seen the liquidation of 64,480 traders, with total crypto
liquidations amounting to $184 million. Specifically, for Bitcoin,
shorts worth $56.9 million and longs worth $16 million were
liquidated. Byzantine General, a crypto analyst, noted the
significant increase in open interest, suggesting that leverage has
been a major factor propelling Bitcoin’s price higher. He stated,
“I can’t help but have the feeling that BTC is trading like someone
knows something. A billion $ in open interest got added in the past
couple hours. It’s mostly this leverage that pushed us higher I
think.” Related Reading: To Infinity And Beyond: Analyst Forecasts
Bitcoin To Hit $100,000 In High-Speed Furkan Yildirim, another
analyst, cautioned about the sustainability of this rally, pointing
out the over $1.7 billion in open interest built up since yesterday
as a sign of overleveraged positions. “The whole truth is that over
$1.7 billion in open interest has been built up since yesterday. We
are increasingly seeing the use of overleveraged positions again,”
he remarked, raising questions of the sustainability of the move.
#2 Bullish News For Bitcoin The rally was further propelled by a
series of optimistic news. Notably, the London Stock Exchange (LSE)
announced its plan to introduce a market for Bitcoin (BTC) and
Ether (ETH) exchange-traded notes (ETNs) by May 28. This decision
opens the door to professional investors in Europe and signifies
the growing institutional acceptance. Related Reading: Bitcoin Top
In Yet? What The Legendary MVRV Ratio Says Moreover, the news of
Peruvian Nilam Resources expressing intent to purchase 24,800
Bitcoins (worth $1.7 billion) “at a discounted rate relative to
current market prices” through an acquisition strategy involving
MindWave, a special purpose entity, has injected a dose of
exhilaration and skepticism into the market, given Nilam’s microcap
OTC stock status. #3 Bitcoin ETFs And Coinbase Premium Another
critical factor influencing Bitcoin’s price rally was the dynamics
surrounding Bitcoin ETFs and the Coinbase premium. The Coinbase
Premium Gap turned positive again yesterday, as observed by
CryptoQuant analyst Maartunn, indicating a robust demand for spot
Bitcoin ETFs. Guess who's back? Bitcoin: Coinbase Premium Gap is
positive again https://t.co/0C7YyyFe2T pic.twitter.com/b73XbSygbl —
Maartunn (@JA_Maartun) March 25, 2024 Given Coinbase’s
custodianship of approximately 90% of Bitcoin ETF assets, the
premium emerges as a pivotal indicator of institutional demand for
Bitcoin. This was further evidenced by the positive ETF net inflows
yesterday, amounting to $15.4 million after last week saw five
consecutive days of net outflows. Grayscale’s GBTC had $350 million
in outflows. Meanwhile, Fidelity’s FBTC started picking up last
week’s slack with $261.8 million in inflows. Blackrock had another
weak day with only $35 million in inflows. Nonetheless, the
Coinbase premium was once again a good indicator. Yesterday's ETF
flows were positive once again after a negative week for $15.4
million.$GBTC had $350 million in outflows. Fidelity started
picking up last week's slack with $261.8 million in
inflows.Blackrock only did $35 million. Price moved from $65k to
above $70k. A day… pic.twitter.com/HCNwa7L2p8 — WhalePanda
(@WhalePanda) March 26, 2024 #4 Technical Breakout From a technical
perspective, Bitcoin’s price breakout from a descending parallel
trend channel on the 4-hour chart marked a crucial turning point.
The successful retest of the strong resistance zone (red zone) has
confirmed the breakout’s legitimacy, leading to a more than 7%
increase in Bitcoin’s price. This technical movement has bolstered
the confidence of traders and investors alike, contributing to the
momentum that has driven the price past the $70,000 threshold.
Featured image created with DALL·E, chart from TradingView.com
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