Bitcoin spiked to start the final week of March, reclaiming the $70,000 level. The price of the flagship cryptocurrency was last higher by 7.8% at $70,995.48, according to Coin Metrics. It briefly rose to $71,239.31 in late afternoon trading as the stock market closed. Ether jumped 7.4% to $3,634.80. Most other cryptocurrencies rode the bitcoin wave, too. The reason for Monday’s big run was unclear, but the cryptocurrency’s price action in March has been characterized by new highs followed by healthy pullbacks. “The record GBTC outflows over the last two weeks, likely caused by Genesis and Gemini bankruptcy liquidations, contributed to weakness in spot prices, but several technical indicators pointed to seller exhaustion,” said Alex Thorn, head of firmwide research at Galaxy Digital.
Sam Callahan, lead analyst at bitcoin services firm Swan Bitcoin, said it’s likely tied to the messaging coming from the Federal Reserve last week. “Fed officials made it clear last week that they are considering both rate cuts and reducing the pace of its quantitative tightening program this year,” he said. “Such actions will enhance liquidity conditions, acting as a positive catalyst for asset prices. Bitcoin functions as a barometer of liquidity conditions and responded favorably to the Fed’s messaging that monetary policy will likely ease in the near future.”
Indeed, Bitcoin has become sensitive to demand from spot Bitcoin exchange-traded funds (ETFs), which were approved by U.S. regulators in January and have ushered in a fresh wave of investor interest in cryptos—a key force behind Bitcoin’s 60% rise this year.
Last week “marked the end of a 7-week cycle” of inflows into crypto investment products as investors withdrew more than $942 million, according to a March 25 report by CoinShares. “We believe the recent price correction led to hesitancy from investors, leading to much lower inflows into new ETF issuers in the US, which saw US$1.1bn inflows, partially offsetting incumbent Grayscale’s significant US$2bn outflows last week,” said CoinShares analyst James Butterfill.
As Bitcoin’s Age Consumed metric grows, indicating previously dormant addresses holding Bitcoin are now re-entering circulation, the market may see an increase in volatility. Moreover, with Bitcoin’s ascent, altcoin markets are also buzzing, with the likes of BNB, DOGE, and TON seeing notable gains. Yet, as the Total Crypto Market rests at $1.191 trillion, BTC still maintains a dominant position in the market, and an altcoin season has not yet been declared.
Relevant articles:
– Bitcoin jumps 7%, retakes $70,000 to start the week
– Bitcoin Jumps to Above $71,000 With Record Highs in Sight, Barron’s, Tue, 26 Mar 2024 08:56:14 GMT
– Solana and Avalanche Lead Crypto Market Recovery, Yahoo Finance, Tue, 26 Mar 2024 05:48:00 GMT
– 3 reasons why Bitcoin price is up today, Cointelegraph, Mon, 25 Mar 2024 19:40:51 GMT