Bitcoin Price Surges Past $71,000: 4 Key Reasons Behind The Rally

Jake Simmons

1 year ago

3 mins read

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The Bitcoin price has soared past the $71,000 mark. In the past 24 hours alone, the price of Bitcoin surged by 6.5%, climbing from just below $65,500 to reach $71,491. This remarkable rally can be attributed to a combination of factors that have collectively contributed to the upward trajectory of the world’s leading cryptocurrency. Here’s a closer look at the four key reasons behind Bitcoin’s latest price surge.

#1 Futures Market Influence

The futures market has played a pivotal role in driving Bitcoin’s price upwards. According to data from Coinglass, the past 24 hours have seen the liquidation of 64,480 traders, with total crypto liquidations amounting to $184 million. Specifically, for Bitcoin, shorts worth $56.9 million and longs worth $16 million were liquidated.

Byzantine General, a crypto analyst, noted the significant increase in open interest, suggesting that leverage has been a major factor propelling Bitcoin’s price higher. He stated, “I can’t help but have the feeling that BTC is trading like someone knows something. A billion $ in open interest got added in the past couple hours. It’s mostly this leverage that pushed us higher I think.”

Furkan Yildirim, another analyst, cautioned about the sustainability of this rally, pointing out the over $1.7 billion in open interest built up since yesterday as a sign of overleveraged positions. “The whole truth is that over $1.7 billion in open interest has been built up since yesterday. We are increasingly seeing the use of overleveraged positions again,” he remarked, raising questions of the sustainability of the move.

#2 Bullish News For Bitcoin

The rally was further propelled by a series of optimistic news. Notably, the London Stock Exchange (LSE) announced its plan to introduce a market for Bitcoin (BTC) and Ether (ETH) exchange-traded notes (ETNs) by May 28. This decision opens the door to professional investors in Europe and signifies the growing institutional acceptance.

Moreover, the news of Peruvian Nilam Resources expressing intent to purchase 24,800 Bitcoins (worth $1.7 billion) “at a discounted rate relative to current market prices” through an acquisition strategy involving MindWave, a special purpose entity, has injected a dose of exhilaration and skepticism into the market, given Nilam’s microcap OTC stock status.

#3 Bitcoin ETFs And Coinbase Premium

Another critical factor influencing Bitcoin’s price rally was the dynamics surrounding Bitcoin ETFs and the Coinbase premium. The Coinbase Premium Gap turned positive again yesterday, as observed by CryptoQuant analyst Maartunn, indicating a robust demand for spot Bitcoin ETFs.

Guess who's back? Bitcoin: Coinbase Premium Gap is positive again
https://t.co/0C7YyyFe2T pic.twitter.com/b73XbSygbl

— Maartunn (@JA_Maartun) March 25, 2024

Given Coinbase’s custodianship of approximately 90% of Bitcoin ETF assets, the premium emerges as a pivotal indicator of institutional demand for Bitcoin. This was further evidenced by the positive ETF net inflows yesterday, amounting to $15.4 million after last week saw five consecutive days of net outflows.

Grayscale’s GBTC had $350 million in outflows. Meanwhile, Fidelity’s FBTC started picking up last week’s slack with $261.8 million in inflows. Blackrock had another weak day with only $35 million in inflows. Nonetheless, the Coinbase premium was once again a good indicator.

Yesterday's ETF flows were positive once again after a negative week for $15.4 million.$GBTC had $350 million in outflows. Fidelity started picking up last week's slack with $261.8 million in inflows.
Blackrock only did $35 million.

Price moved from $65k to above $70k. A day… pic.twitter.com/HCNwa7L2p8

— WhalePanda (@WhalePanda) March 26, 2024

#4 Technical Breakout

From a technical perspective, Bitcoin’s price breakout from a descending parallel trend channel on the 4-hour chart marked a crucial turning point. The successful retest of the strong resistance zone (red zone) has confirmed the breakout’s legitimacy, leading to a more than 7% increase in Bitcoin’s price. This technical movement has bolstered the confidence of traders and investors alike, contributing to the momentum that has driven the price past the $70,000 threshold.

Featured image created with DALL·E, chart from TradingView.com

Jake Simmons

Jake Simmons, a dedicated crypto journalist, has been passionate about Bitcoin since 2016 when he first learned about it. Through his extensive work with NewsBTC.com and Bitcoinist.com, Jake has become a trusted voice in the crypto community, guiding newcomers and seasoned enthusiasts alike towards a deeper understanding of this dynamic field.

His mission is simple yet profound: to demystify Bitcoin and cryptocurrencies and make them accessible to everyone.
With a professional career in the Bitcoin and crypto scene that began right after graduating with a degree in Information Systems in 2017, Jake has immersed himself in the industry. Jake joined the NewsBTC Group in late 2022. His educational background provides him with the technical prowess and analytical skills necessary to dissect complex topics and present them in an understandable format. Whether you are a casual reader curious about Bitcoin or an investor seeking to navigate the latest market trends, Jake’s insights offer valuable perspectives that bridge the gap between complex technology and everyday usage.

Jake is not just a reporter on technological trends; he is a firm believer in the transformative potential of Bitcoin over traditional fiat currencies. To him, the current financial system is on the brink of chaos, propelled by unchecked government actions and flawed Keynesian economic policies. Drawing from the principles of the Austrian school of economics, Jake views Bitcoin not merely as a digital asset but as a crucial step towards rectifying a failing monetary system. His libertarian views reinforce his stance that just as the church was separated from the state, so too should money be freed from governmental control.

For Jake, Bitcoin represents more than just an investment; it's a peaceful revolution. He envisions a future where Bitcoin fosters a sustainable and responsible financial framework for generations to come. His advocacy is not about opposition but about evolution, about laying the groundwork for a system that prioritizes transparency and equity over secrecy and inequality.

As a journalist, Jake’s articles are crafted with the precision of a scholar and the passion of a true believer. He provides not only news but also thoughtful analysis that connects the dots between daily developments and larger economic theories. His work is a beacon for those lost in the technical jargon often associated with crypto discussions, illuminating the practical implications and benefits of these technologies.

In summary, Jake Simmons is not just reporting on a revolution; he wants to be part of it, fully committed to enhancing public understanding and adoption of Bitcoin and cryptocurrencies. His work is more than just a collection of articles; it’s a resource, a guide, and a companion for anyone ready to explore the potential of this digital frontier. Whether you are taking your first steps into crypto or are a veteran looking to stay on top of the latest trends, Jake’s insights provide clarity and foresight in an often unpredictable industry. Join him on this journey to reshape the world of finance, one post at a time.

You can engage with his latest takes on Twitter: @realJakeSimmons.

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