In a remarkable turn of events, the price of Bitcoin experienced a significant surge of over 10%, reaching a new high for 2024 at $64,000 on February 28th. This surge in price is largely attributed to investors’ anticipation of the upcoming supply halving event, a phenomenon that typically leads to a strong upward movement in price.
Another factor contributing to Bitcoin’s price action is the steady inflow of funds into newly launched spot Bitcoin exchange-traded funds (ETFs). These ETFs are believed to be playing a crucial role in driving Bitcoin’s price upward.
While some technical analysts have expressed concerns about Bitcoin’s market structure and the high funding rates across the market, suggesting that heavy leverage use could eventually lead to a correction driven by liquidation, options analysts hold a more optimistic view. They argue that the current rally in Bitcoin’s price still has room to grow, dismissing claims that the price has become overextended.
Citing data from Bitcoin’s options markets, open interest, and funding rates, analyst Chris Newhouse supports this optimistic view. Independent market analyst Nunya Bizniz also adds to the bullish perspective, pointing out that Bitcoin’s relative strength index (RSI) is currently above 70. According to previous market cycles, Bitcoin’s price has remained in an uptrend for at least 335 days after the RSI surpassed 70.
However, shortly after reaching the $64,000 mark, the price of Bitcoin experienced a flash crash, dropping to $58,700. This rapid decline can be attributed to a sell wall at that price level and the clearing out of leveraged long positions. Nonetheless, at the time of writing, Bitcoin had managed to recover nearly 5% of the losses.
With Bitcoin currently less than 13% away from its all-time high, both retail and institutional investors have high hopes that the record level of $68,900 will be surpassed before the supply halving event, which is scheduled to occur in approximately 52 days.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers are encouraged to conduct their own research before making any decisions.