BTC is Approaching its Historical High of $69,000, How Will it Fluctuate in the Future?

[TL；DR]

The craze for Bitcoin continues to soar, approaching its historic high of $69,000. Its price has surged in the past seven months, leading the market in revenue.

In addition to promoting spot Bitcoin ETFs, positive factors such as the Federal Reserve’s expectation of interest rate cuts, the recovery of market confidence, innovative iterations of industry technology, and the halving of Bitcoin have also contributed to the rise in Bitcoin prices to varying degrees.

The current market sentiment is overheated, and there are still potential downward expectations from various indicators. While enjoying the bull market dividend, investors must avoid FOMO and make reasonable decisions as much as possible.

Introduction

Bitcoin has surged consecutively, approaching its historic high of $69,000. This article will provide the latest interpretation of how the future market will fluctuate.

Bitcoin Has Risen for 7 Consecutive Months, Approaching its All-time High

Since the beginning of this year, Bitcoin has seen a significant increase, with its price rapidly rising and its gains leading the market, thus triggering a sustained trading frenzy.

After entering March, the upward trend has not stopped. As of the writing date, the coin price has been rising for 7 consecutive months, and recently, it has surpassed $68,000, only $300 away from the historic high of $69,000. Another new high is just around the corner after two years.

Source: Gate.io

In addition, according to CoinGlass data, as of March 5th, the Fear and Greed Index has climbed to 90, and the Bitcoin exchange market has a contract holding of $32 billion, with a liquidation amount of $105 million within 24 hours.

If compared horizontally, it can better demonstrate the impressive performance of Bitcoin. According to data from Infinite Market Cap, the current total market value of Bitcoin has reached $1.347 T, surpassing the market value of silver and rising to 8th place in the global asset category, accounting for 9.45% of the total market value of gold. For a new asset born 15 years ago, its value discovery and game process far exceed traditional assets.

Source: Infinite Market Cap

In summary, it is not difficult to see from various data that the current pace of value discovery for Bitcoin is significantly accelerating, with a severe imbalance between long and short positions in the short term. The market is very bullish, which once again highlights the activity of the Bitcoin market and the optimistic expectations of investors for its future.

The Landing of Spot ETFs and the Fourth Halving May Be the Inflationary Factors

Bitcoin has been soaring rapidly recently, even breaking the pattern of the past two bull markets. Multiple factors support the price surge.

The primary factors are the listing of spot Bitcoin ETFs and the increase in holdings of Bitcoin by institutions such as MSTR. This is a structural change in the funding game of Bitcoin’s current bull market, and also the biggest incentive for the sharp rise in coin prices. In January of this year, the United States Securities and Exchange Commission (SEC) Chairman announced that the first batch of Bitcoin ETFs had been officially approved and began trading the next day. This major measure has greatly lowered the purchase threshold for Bitcoin, thereby attracting more institutional and retail investors to participate widely. We have previously written a detailed discussion on the impact of this groundbreaking event. Readers can click “How Will the Bitcoin Market Continue After ETFs Plummet by 15% After Landing?“ for more information.

With the continuous growth of Bitcoin spot ETF trading volume, the injection of funds and market speculation on this information have formed a positive transmission compared to the rise of Bitcoin prices. In fact, with the successful listing of 11 companies’ Bitcoin ETFs, market feedback has been extremely enthusiastic, with trading volume quickly exceeding $4.4 billion and a total holding value of $54.4 billion, accounting for nearly 4% of Bitcoin’s total market value.

Source: coinglass

Furthermore, it must be mentioned that the halving event in Bitcoin’s history has always been the focus of market speculation. We have also delved into this topic in our article “Is the Bullish Market Coming With the Approaching of BTC Halving?“. According to Gate.io’s data, Bitcoin is about to experience its fourth halving on April 21, meaning mining rewards every four years will be halved.

Source: Gate.io

The fourth halving will make Bitcoin’s supply hardness stronger than gold for the first time, which not only highlights the rarity and value of Bitcoin but also stimulates market Optimism.

In summary, the recent surge of Bitcoin is not accidental but the result of multiple factors working together. From the approval and listing of spot Bitcoin ETFs to the positive performance of market feedback, to the promotion of the “halving” event and the influence of social media, and even the potentially positive news of the Federal Reserve’s interest rate cut this year, these factors have jointly driven the rise of Bitcoin prices.

Long-Term Bull Market Journey, Intensified Short-term Volatility

Although it is difficult to predict the short-term volatility direction of Bitcoin at such a critical juncture, it is foreseeable that the fluctuation rhythm of Bitcoin may not weaken in the short term.

From historical experience, when Bitcoin breaks through its previous high, it often leads to a significant decline. Once the breakthrough is officially confirmed, it usually brings a frenzy of Altcoins and enters the Alt Season.

For example, in early January 2017 and late November 2020, Bitcoin approached historical highs twice, experiencing declines of 30% and 18%, respectively.

In fact, since the birth of Bitcoin, its price fluctuations have been very intense, and it only slowed down this year, indicating that Bitcoin, as a relatively mature asset class, is deepening its consensus.

Since the beginning of last year, the price of Bitcoin has gradually recovered from the panic of falling below $16,000. In the following quarter, the cost of Bitcoin rebounded and stabilized at around $30,000, and then fluctuated for nearly half a year. By September 2023, Bitcoin prices had risen strongly for almost 7 months, breaking through the $40,000, $50,000, and $60,000 levels consecutively. Since March this year, the price of Bitcoin has accelerated and is only one step away from its historical peak.

Source: @100trillionUSD

However, despite the continuous rise in Bitcoin prices, investors must be cautious, especially those looking forward to it. A recent example is that on February 29th, the price of Bitcoin broke through the $64,000 mark but then quickly fell, falling by $5,000 within a few minutes, with the increase narrowing from a maximum of 13% to less than 6% at one point. At that time, nearly 180,000 people in the Bitcoin market were sold out.

In summary, we believe that the approval of Bitcoin ETFs not only enhances the legitimacy of crypto assets but also injects strong external impetus into the rise of Bitcoin prices. The upcoming fourth halving is an internal driving force for increasing Bitcoin’s value, making the short-term rise of Bitcoin inevitable.

In the current booming Bitcoin market, we still believe that the market sentiment is overheated, and there are still potential downward expectations from various indicators. While enjoying the bull market dividend, investors must avoid FOMO and make reasonable decisions as much as possible.