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During the early hours of March 11, seemingly out of nowhere, Bitcoin saw a massive surge that propelled it from $69,000 all the way to $71,500 as of the time this article was being written. This marks yet another all-time high for the king of cryptocurrencies.
Even with the impressive surge, investors aren’t sure what to think. There is a strong sense of short-term negativity and skepticism. Many think that Bitcoin will experience another correction, possibly pulling it back below the $70k mark.
According to data from IntoTheBlock, the majority of Bitcoin holders bought their coins at an average price of 465,200. If all of these investors continue to HODL, Bitcoin’s price might avoid correcting. However, if the support level of $70,000 breaks, prices could soon start to fall towards $63,000 or even lower. It’s a tough spot for Bitcoin right now because it faces risks of being sold at key price points while also being bought by exchange-traded funds (ETFs) all the time.
The effect of buying ETFs has surprised many, and even long-term Bitcoin enthusiasts are now rethinking their price predictions. Some of them now think that even $100,000 is a low estimate for the short term. On the other hand, some are worried that the quick rise in price could lead to a peak in Bitcoin’s price sooner than expected, and therefore make the next bear market that much unbearable.
Soon, we’re going to get some important reports on the US economy, like the Consumer Price Index (CPI) and Producer price Index (PPI) for February. These could affect what the Federal Reserve decides to do with interest rates, and as usual, are a big deal for Bitcoin, as miners keep trying to make the most of the high prices before the halving in April.
As this week kicks off, we’re all watching how much spot ETFs are buying Bitcoin because. While big investors are super excited, there’s also a bit of worry that people might not want ETFs as much in the future. For instance, Cathie Wood said thinking Bitcoin could reach $1 million might have been conservative.