According to Bloomberg, Bitcoin is experiencing a strong rally, with little resistance in its path. The largest cryptocurrency has risen for two consecutive days and is approaching its all-time high, driven by the expected demand from exchange-traded funds (ETFs) at the start of the week.
At its peak, the most liquid token reached $65,010, its highest level since November 2021, before settling at $64,917 as of 8:28 a.m. London time. This surge is primarily fueled by the seemingly insatiable demand for Bitcoin ETFs listed in the US on 11 January 2021. In the last 12 months, Bitcoin has seen a 186% increase in value.
US-listed Bitcoin ETFs have attracted $7.35 billion in net inflows since their debut, with major fund names like BlackRock Inc. and Fidelity Investments leading the way. Even significant outflows of nearly $9 billion from Grayscale Bitcoin Trust since the ETFs were listed have not deterred traders.
According to Hayden Hughes, co-founder of social-trading platform Alpha Impact, the low liquidity over the weekend has resulted in markets moving upward in anticipation of continued ETF inflows and price rallies.
Traders are confident that Bitcoin will surpass its previous record of almost $69,000, set during the Covid pandemic in November 2021, due to strong demand for ETFs and the fear of missing out before the upcoming Bitcoin halving, expected in April this year. The halving, which occurs when the mining reward is cut in half, could decrease the coin’s supply growth and further increase demand.
Other cryptocurrencies, such as Cardano and Solana, also saw gains on Monday, with increases of 8% and 1%, respectively.
Bitcoin’s rally has also boosted smaller tokens, known as “meme coins.” Dogecoin saw a 20% increase, while Shiba Inu rose by 34% in the last 24 hours. According to Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets, this situation is reminiscent of the 2021 bull run, with retail traders seeking quick profits from volatile tokens.
Trading in crypto derivatives, which reflects traders’ positions, also indicates a bullish outlook. The open interest in Chicago-based CME Group’s Bitcoin and Ether futures markets is just 1.8% away from their respective record highs, suggesting increased interest in crypto-related exposure and hedging among US institutions.
Mauron predicts that Bitcoin will test its all-time highs in the short term, with the significant level of $70,000 providing strong resistance.
The Bloomberg report also mentions that the price of Bitcoin has been updated in the second paragraph, and readers can find more financial news in Bloomberg Businessweek. This article is copyrighted by Bloomberg L.P. and was published in 2024.