Bitcoin's price to smash previous records: Insights on the top three causes fueling this leap
📣 Bitcoin's on a roll again! After busting through the significant resistance at $97,000, the world's leading cryptocurrency reached a high not seen since February. As of Saturday, Bitcoin was trading around $96,500, up a staggering 30% from its low in April. Here are the top three reasons why Bitcoin could shatter its all-time high this year.
Reduced supply on exchanges
The first reason for the bullish sentiment is a drastic drop in the supply of Bitcoin on centralized exchanges. The current supply of 1.42 million coins is the lowest since November 2018, down from a high of 3.21 million in 2018. Meanwhile, the coin supply outside of exchanges has soared to 18.43 million, indicating that investors aren't dumping their coins, helping create an impending supply squeeze. Major Bitcoin holders like Michael Saylor's Strategy and companies like Coinbase, Tesla, Galaxy Digital, and Block have shown no signs of selling.
Soaring retail and institutional demand
Another reason for Bitcoin's continued upward trend is the accelerating demand from both retail and institutional investors. Indicators like Bitcoin Exchange-Traded Fund (ETF) inflows show that ETFs have had only four months of outflows since their inception in January last year, cumulatively adding over $40 billion in assets. Blackrock's IBIT, Fidelity's FBTC, and Ark Invest's ARKB have garnered $60 billion, $20 billion, and $19 billion in assets respectively. This rapid influx of funds symbolizes a burgeoning institutional appetite for Bitcoin in the U.S. Moreover, there is growing demand from countries seeking to diversify away from the U.S. dollar.
Technical analysis
Bitcoin's price is also being propelled higher by strong technical indicators. The coin has kept above the ascending trendline since Aug. 5 last year, and has broken above the crucial resistance level at $88,690, the neckline of a double-bottom pattern. Additionally, Bitcoin has surged past the 50-day and 100-day Exponential Moving Averages (EMAs), indicating a growing momentum that could push it beyond $100,000 and eventually to a new all-time high.
According to some analysts, Bitcoin could reach $200,000, while Ark Invest expects it to soar to $2.4 million by 2030. This bullish sentiment is fueled by Bitcoin's growing adoption, its potential as a store of value akin to gold, and technological advancements. However, the specific targets and reasons for the bullish forecasts can vary between institutions.
- The reduced supply of Bitcoin on centralized exchanges, currently at 1.42 million coins, is the lowest since November 2018 and contributes to the bullish sentiment.
- Institutions like Blackrock's IBIT, Fidelity's FBTC, and Ark Invest's ARKB have garnered significant assets, totaling $60 billion, $20 billion, and $19 billion respectively, indicating a burgeoning institutional appetite for Bitcoin.
- The ongoing demand from retail investors, coupled with the soaring institutional demand, is another reason for Bitcoin's continued upward trend.
- The coin's price is being propelled higher by strong technical indicators, such as staying above the ascending trendline since August 2020 and breaking above the crucial resistance level at $88,690.
- Bitcoin has surged past the 50-day and 100-day Exponential Moving Averages (EMAs), suggesting a growing momentum that could push it beyond $100,000.
- Analysts predict that Bitcoin could reach as high as $200,000, while Ark Invest expects it to soar to $2.4 million by 2030, due to factors such as its growing adoption and technological advancements.
- Tensions in finance may cause investors to look for alternatives to traditional investments, potentially contributing to the highest Bitcoin prices in months.
