Bitcoin (BTC) continued its upward rally on February 27, reaching a 27-month high of $57,513. This surge in price has boosted the wider crypto market, thanks to increasing investor sentiment and positive inflows into spot Bitcoin exchange-traded funds (ETFs). Currently, BTC is trading at $57,073, representing a 10% increase over the past 24 hours.
The last time Bitcoin traded above $57,000 was more than two years ago, on December 2, 2021. However, at that time, the price had already peaked and was entering a prolonged bear market. By January 24, 2022, Bitcoin’s price had dropped to $32,987, a decline of 42% from its previous stint above $57,000.
There are several factors driving the current price movement of BTC. These include consistent inflows into spot Bitcoin ETFs, an upcoming supply halving, and positive investor sentiment from both retail and institutional investors.
One of the main contributors to Bitcoin’s recent rally is the continued buying by institutional investors. Business intelligence firm MicroStrategy recently announced that it had acquired an additional 3,000 BTC for a total of $155 million. This brings their total BTC holdings to 193,000, acquired at an average price of $31,544.
Furthermore, the nine new spot Bitcoin ETFs have amassed a total of 300,000 BTC, worth $17 billion, since their debut on January 11. These ETFs now hold 1.5% of Bitcoin’s maximum supply.
The combination of decreasing supply and strong demand for Bitcoin is expected to drive its price higher in the near future. Market intelligence firm Santiment predicts that Bitcoin’s rally above $57,000 puts it within 19.9% of its previous high of $68.6K established 27 months ago. Bitcoin’s market capitalization has also surpassed $1.1 trillion.
Another factor supporting Bitcoin’s price is the anticipation of an upcoming halving event scheduled for April 20. This event will cut the reward for mining new blocks on the Bitcoin blockchain in half. As a result, the BTC rewards issued to miners will be reduced from 6.25 BTC to 3.125 BTC per block.
Investors are rushing to position themselves ahead of the halving event, as they believe it will further drive up Bitcoin’s price. Crypto trader and analyst Rekt Capital suggests that the current uptick in Bitcoin represents the final “Pre-Halving Rally,” indicating that deeper pullbacks are unlikely.
Bitcoin’s rise above $57,000 has also led to a surge in the liquidation of crypto-leveraged positions. Short positions amounting to $262 million were liquidated in the past 24 hours, compared to $120 million in long liquidations. This increase in liquidations indicates the high volatility in the market.
Overall, market participants expect Bitcoin’s bullish price action to continue, leading to a much-anticipated bull run. However, it’s important for readers to conduct their own research and make informed decisions when it comes to investment and trading moves, as they involve risks.