cryptonews.com
The Bitcoin ($BTC) price saw 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 dropping into the $68,000s.
$BTC has since recovered over 3.5% from earlier session lows to $71,000, with its violent $4,500 price swing having wiped out positions held by leverage trader worth over $100 million, as per coinglass.com.
The Bitcoin price’s strong rebound from sub-$70,000 intra-day lows will embolden the bulls, who remain very much in control.
Bitcoin is up 12.7% in seven days and 42% in the past 30 days, as per CoinMarketCap.
Driving the upside has been a mix of bullish fundamentals.
These include huge continual inflows into the recently launched spot Bitcoin ETFs and FOMO as Bitcoin gears up for its four-yearly halving event.
Spot ETF trading volumes clocked in at close to $7 billion on Monday, as per The Block data.
Last week, volumes averaged over $6.5 billion per day.
That’s a more than 6x jump from early February when daily volumes were averaging around $1 billion per day.
Surging demand for spot Bitcoin ETFs has powered the price higher. Source: The BlockWhere Next for the Bitcoin Price?
And while the latest hotter-than-expected US inflation figures has pushed back on Fed rate cut expectations, with the CME Fed Watch Tool showing that money markets now price a 32% of no rate cuts by June (up from 28% on Monday), analysts do not expect this to have a lasting impact on the current bull market.
“There is too much bullish momentum in crypto,” Nansen analyst Aurelie Barthere said in a research note.
“We do not expect a significant sell-off for crypto as this repricing has happened in the past few months without questioning the bull market.”
The rate at which new $BTC tokens are issued to network validators (or miners) is scheduled to halve next month.
With the supply shock of the halving looming coupled with a massive influx of new demand from the ETFs, Bitcoin price risks remain tilted strongly to the upside.
While there could easily be short-term setbacks, Bitcoin remains in a period of price discovery as it scales all-time highs.
In such scenarios, investors tend to focus on major round numbers as their price targets.
$100,000 is one such level that the market is likely to be fixated on.
There remains an outside chance that Bitcoin can rally here ahead of the April halving.