The Bitcoin Price Surges Above $44,000
The price of Bitcoin (BTC) has reached its highest level since January 12, surpassing $44,000. This surge in the world’s largest cryptocurrency by market cap seems to be influenced by the bullish momentum in US equities. The S&P 500 came close to reaching 5,000 for the first time, with a 1% increase attributed to a stronger-than-expected earnings season. Over the years, the Bitcoin price has generally shown a positive correlation with movements in the US equity market.
Bitcoin Price Benefits from Various Factors
Aside from the bullish momentum in US equities, there are two other tailwinds supporting the Bitcoin price. The index of US regional bank stocks has declined by 11% in the last month due to concerns about a potential bank crisis. Additionally, anticipation of easier financial conditions later this year is also helping support US stocks and Bitcoin. Major figures in the crypto market, such as Arthur Hayes, have predicted that a US bank crisis could occur in March when a key Fed liquidity program is set to expire. This prediction suggests that the Bitcoin price could reach $1 million.
Inflows into Spot Bitcoin ETFs Act as Tailwind
As safe-haven flows start returning, net flows into spot Bitcoin ETFs are acting as another major tailwind. Outflows from Grayscale’s Bitcoin Trust (GBTC) are decreasing while inflows into newly launched ETFs like BlackRock’s and Fidelity’s are increasing. These two ETFs have attracted nearly $6 billion in flows since their launch less than a month ago, offsetting GBTC’s outflows. With GBTC selling slowing down, net ETF inflows are expected to continue supporting the Bitcoin price.
Bitcoin Bulls Regain Control
With the Bitcoin price surpassing short-term resistance at $44,000 and its major moving averages, it appears that the bulls are back in control. The bounce from the 100DMA and November 2023 support suggests that a short-term bottom has been reached. The odds favor a move towards the 2024 highs at $49,000, assuming ETF flows remain positive and there are no significant changes in Fed rate-cutting expectations. Given the potential bank crisis and the upcoming halving, it is possible that the Bitcoin price could exceed $50,000.
Hot Take: Bitcoin Price Soars as Bulls Take Charge
The Bitcoin price has surged above $44,000 as bullish momentum in US equities and other factors continue to support its upward movement. With a positive correlation to movements in the US equity market, Bitcoin has benefited from the strong performance of the S&P 500. Additionally, concerns about a potential bank crisis and anticipation of easier financial conditions have contributed to the rising price. Inflows into spot Bitcoin ETFs have acted as a tailwind, canceling out outflows from Grayscale’s Bitcoin Trust. With these factors in play, it is likely that the Bitcoin price will continue to rise, potentially reaching new highs in the near future.
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