Bitcoin (BTC) has surged above $71,000, reaching its highest level since March 15. The rise in BTC’s price can be attributed to positive capital flows into spot BTC ETFs. Over the past 24 hours, BTC has increased by more than 0.55% and hit a weekly high of $71,582 on March 26. Several factors are driving this price movement, including consistent inflows into spot Bitcoin ETFs, the upcoming Bitcoin halving event, and the overall positive sentiment among institutional investors. Let’s examine the factors behind Bitcoin’s current rally.
Large investors in Bitcoin, known as whales, have been accumulating more BTC in anticipation of future price increases. Data from market intelligence firm Santiment shows that the percentage of wallets holding between 1,000 and 10,000 BTC has increased from 23% on January 1 to 25.17% on March 26. Similarly, the percentage of wallets holding between 10,000 and 100,000 BTC has also seen a spike, rising from 11.68% on March 2 to 12.42% on March 21 before slightly dropping to 11.98%.
This accumulation of Bitcoin by whales is supported by a decrease in BTC deposits on exchanges. According to Glassnode data, the number of deposit transactions to known exchange wallets has been decreasing since March 5, even when BTC’s price fell by more than 9% on March 19. This decrease in deposits suggests a lack of intent to sell, which is generally seen as a bullish sign. Additionally, there has been an increase in the number of whales transferring Bitcoin from exchanges to self-custody wallets, further indicating a long-term investment strategy.
Furthermore, the upcoming Bitcoin halving event is also contributing to the price increase. The halving event, scheduled for April, involves cutting the reward for mining new blocks on the Bitcoin blockchain in half. After the halving, the BTC rewards issued to miners per block will be reduced from 6.25 BTC to 3.125 BTC. Market data provider Glassnode suggests that the buying power of ETFs will overshadow the traditional supply squeeze effect typically associated with halving events. The decisions of long-term holders (LTHs) to sell or hold their BTC can significantly impact market liquidity and sentiment.
Bitcoin traders and analysts are now focused on the next price level for BTC after its rally above $70,000. Data from IntoTheBlock shows that whales accumulated more than 80,000 BTC when the price dropped to $64,000. The firm’s In/Out of the Money Around Price (IOMAP) model indicates that BTC has relatively strong support around the $64,000 level compared to the resistance it faces in its recovery path. Traders are determined to keep the price above $70,000, and some analysts predict a potential rise to $100,000.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.