2024-03-01 20:03:46
The end of February ended with a huge jump above 60,000 dollars for the Bitcoin price. And with this, BTC brought the largest green candle on the chart in history. Blackrock’s bitcoin ETF entered the top 150 ETFs, and the capitalization of the largest cryptocurrency exceeded the total value of the largest companies.
While the price of bitcoin continues its parabolic rise, the question arises, will the new all-time high be the next stop?
The week’s most important cryptocurrency news in one place
Traders who followed the evolution of Bitcoin in February 2024 witnessed an extraordinary month. The largest cryptocurrency rose to almost a record high, and such a monthly increase has not been seen since December 2020. Bitcoin has never produced such a large monthly green candle.
The record Bitcoin price rise brought record capital to Bitcoin ETFs as well. BlackRock’s IBIT ETF hit a record daily inflow of $520.2 million already on Tuesday. That is, one day before the price of Bitcoin increased by more than 10% in one day. And on Wednesday, he was able to counter this once once more by absorbing more than 600 million dollars from the paper traded on the stock exchange. The question therefore arises as to whether the movement of capital flowing into ETFs can also serve as an indicator for the movement of the Bitcoin exchange rate.
While the price of Bitcoin crossed the $62, $63, and then $64,000 levels in just a few hours, it caused a huge increase in traffic on the leading crypto exchanges. Binance, the Kraken and Coinbase also constantly struggled with technical problems. In the meantime, the stock exchanges recovered, but at the same time, it caused a momentary panic for many that, in addition to the inoperability of transactions, the balances on Coinbase, for example, were also reset to zero.
The real Bitcoin whales have appeared on the market
Bank Of America’s investment arm Merrill Lynch and Wells Fargo’s wealth management unit have also reportedly begun offering Bitcoin spot ETFs to some of their clients. Along with them, the really big bitcoin whales appeared on the market.
While 95% of Bitcoin owners are profitable, the question arises as to who actually covers the majority of the market.
Investors who hold at least 1000 BTC in their wallets are called Bitcoin whales. However, this group does not include miners and centralized crypto exchanges, as they are not considered general investors. According to Glassnode’s analysis, unrealized profits for rookie whales have jumped significantly and are now equivalent to more than $7.3 billion.
While the crypto community is already speculating regarding which country might have secretly invested a significant amount of money in Bitcoin, we know exactly who these big Bitcoin whales are. THE Collected by BBC known owners of the largest BTC stocks. These include publicly traded companies like MicroStrategy or Tesla, individuals like Michael Saylor, the Winklevoss twins and Peter Thiel, and crypto companies like Block One or Tether.
Bitcoin made history
BlackRock’s IBIT spot Bitcoin exchange-traded fund (ETF) reached $10 billion in assets under management (AUM) within seven weeks of its January 11 launch. The fund currently holds more than 162,000 Bitcoins as collateral, making it one of the few ETFs to surpass the $10 billion mark.
Putting the results of IBIT into context, it is worth highlighting that only a fraction of ETFs were able to exceed the $10 billion AUM limit. Moreover, most of them were created more than a decade ago, which is how long it took to accumulate wealth. IBIT’s success is therefore significant, as only 150 out of 3,400 global ETFs exceeded this dream AUM limit of $10 billion. And he managed to do this in just seven weeks.
Apart from this, Bitcoin also achieved another huge milestone by entering the list of the 10 largest assets by market capitalization.
Data from CompaniesMarketCap shows that Bitcoin is currently the 10th largest asset by market capitalization. This puts BTC ahead of giants like Berkshire Hathaway and the world’s largest bank, JPMorgan Chase. What is particularly interesting regarding these two giants is that their leaders – Warren Buffett and Jamie Dimon – have been bashing Bitcoin for years. It has been called “rat poison” and “useless pet” over the years.
In the midst of Bitcoin euphoria, it doesn’t hurt to be sane
While the market is slowly transitioning into moments of euphoria, it does not hurt to be alert.
Some technical analysts have warned that Bitcoin’s market structure and high funding rate are indicative of heavy leverage across the market, which might lead to a painful correction.
Before thinking that Bitcoin is going to the moon, it’s worth looking at the possibilities on the chart.
Let’s put the facts together: $65,000 is serious resistance. If someone bought in at the $30,000 support level, they will sell around $65,000 due to the same logic. Support and resistance play on the grade icon, of course only if we are not talking regarding the Hodlers.
In the meantime, however, there are analysts who ignore the idea that the price action would be excessive and vote for the fact that the current rise is on strong legs.
Referring to Bitcoin’s key options markets, open positions and funding rates, analyst Chris Newhouse said:
“From my perspective, the recent rally is a derivatives-driven move with an overtone of spot demand behind record ETF inflows. The break through the $53,000 region showed relative strength, trading volumes were high, natural demand was there to provide the momentum.”
Bitcoin’s Relative Strength Index (RSI) is now above 70, which highlights the fact that in previous market cycles, BTC remained in an uptrend for at least 335 days before reaching RSI 70.
Professional investors are uncertain
Investor concerns center around the possibility that the strong inflows into Bitcoin ETFs may taper off over time, triggering a significant price correction. This suggests that these traders are either unconvinced by the current bull market trend or do not need more leverage due to macroeconomic uncertainty.
The interpretation of these data results in two different perspectives. Some argue that such an influx cannot be sustained in the long term. Either due to a slowdown in demand when the price of Bitcoin rises. Or even because the risk appetite for cryptocurrency exposure is limited somewhere. Conversely, from a bullish point of view, some traders believe in the “snowball effect”, where the rising Bitcoin price “further inspires” ETF investments.
However, professional bitcoin traders are feeling uneasy for now despite February’s gigantic 40% increase in BTC options markets. The 25% delta-skew serves as an informative indicator. It reveals when market makers are overcharging for upside or downside protection.
And the 25% delta skew indicator of Bitcoin options has remained neutral since February 20, fluctuating between -7% and +7%. This suggests balanced pricing between call and put options. Interestingly, traders became less optimistic just six days following Bitcoin failed to break the $52,500 mark. And this underlines the concern of cryptocurrency investors during the accumulation phases.
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