Last update:
March 12, 2024, 7:37 p.m. EDT | 2 minutes read
Bitcoin (BTC) price experienced wild trading conditions on Tuesday, briefly hitting new all-time highs above $73,000 shortly after the release of hotter-than-expected US inflation data, before suddenly falling to the $68,000 mark.
Since then, BTC has recovered more than 3.5% from previous session lows to $71,000, with its sharp price swing from $4,500 wiping out over $100 million worth of leveraged traders' positions, according to Coinglass.com .
Bitcoin price’s strong recovery from intraday lows below $70,000 will encourage bulls who remain in control.
According to CoinMarketCap, Bitcoin is up 12.7% in seven days and 42% in the last 30 days.
The uptrend was driven by a mix of bullish fundamentals.
These include huge continued inflows into the recently launched spot Bitcoin ETFs and FOMO as Bitcoin prepares for its quadrennial halving.
According to data from The Block, spot ETF trading volume reached nearly $7 billion on Monday.
Last week, average volume was over $6.5 billion per day.
That's a more than six-fold increase since early February, when daily volumes averaged about $1 billion a day.
The increasing demand for spot Bitcoin ETFs has pushed up the price. Source: The Block
What's next for the Bitcoin price?
And while recent better-than-expected U.S. inflation numbers have pushed back Fed rate cut expectations, the CME Fed Watch tool shows money markets are now pricing in 32% of rate cuts by June (up from 28% on Monday). However, analysts do not expect any lasting impact on the current bull market.
“There is too much bullish momentum in cryptocurrencies,” Nansen analyst Aurelie Barthere said in a research note.
“We do not expect a significant sell-off in cryptocurrencies as this revaluation has occurred over the past few months without challenging the bull market.”
The rate at which new BTC tokens are issued to network validators (or miners) is set to halve next month.
With the looming supply shock of the halving and a massive influx of new demand from the ETFs, Bitcoin price risks remain strongly tilted to the upside.
Although short-term pullbacks can easily occur, Bitcoin continues to be in a period of price discovery as it hits all-time highs.
In such scenarios, investors tend to focus on large round numbers as price targets.
$100,000 is one such level that the market will likely be fixated on.
Can Bitcoin price reach $100,000 before April halving? Source: TradingView
There remains a slim chance that Bitcoin can rally here before the April halving.
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