Bitcoin Rollercoaster! Bitcoin Soars Past $64K Before Liquidating $640m

Bitcoin’s epic price rally showed no signs of slowing on February 28th as the crypto king steamrolled past $64,000 for the first time since 2021. The latest surge comes courtesy of bullish traders betting that Bitcoin will conquer its all-time high of nearly $69,000 before its next halving in early May.

TLDR

Bitcoin price hit a new 2024 high of $64,000 on February 28th, partly driven by anticipation of the upcoming halving event
Steady inflows into recently launched Bitcoin spot ETFs are also contributing to Bitcoin’s price gains
Some analysts warn the market conditions show signs of overleverage and could lead to a correction
Options analysts remain bullish, citing key indicators like open interest and funding rates as evidence the rally has room to run
Institutions depleting OTC Bitcoin supply may start buying from public exchanges, creating further upside price pressure

According to market analysts, Bitcoin’s 50% price explosion this month is largely driven by investors anticipating the supply-limiting halving event. Historically, halvings are followed by dramatic upside in Bitcoin’s price.

But that’s not the only factor in play. Steady inflows into recently approved Bitcoin spot ETFs are providing critical buying support. Mainstream investors are hungry for crypto exposure, with Bitcoin ETFs now rivaling gold ETFs in popularity.

However, some are warning about signs of froth and leverage in Bitcoin markets. Technical analysts highlight Bitcoin’s overbought RSI and high funding rates across exchanges as evidence that risky derivatives trading is fueling the rally.

Still, options analysts remain steadfastly bullish. According to Chris Newhouse, “Breaking through the $53K region showed relative strength, volumes were high, natural demand was there, and momentum traders had started to pile in to the trade.”

Indeed, Bitcoin shrugged off a correction to $58,700 that liquidated $640 million in leveraged crypto positions. The shakeout flushed out overextended longs, allowing underlying spot demand to stabilize prices around $62,000 today.

And Bitcoin may have another catalyst in store. Glassnode data reveals plummeting OTC supply after the latest run-up. As institutional desks sell out their offline inventories, big investors will turn to public exchanges to feed their lingering Bitcoin appetite.

The resulting influx of institutional spot demand could give Bitcoin the thrust needed to challenge its former high-water mark. At the time of writing, Bitcoin sits just 12% shy of the coveted $69,000 milestone with 52 days remaining until its 2024 halving event. Buckle up!