Bitcoin (BTC) continued its upward rally on February 27, surging to a 27-month high of $57,513. This boost in price has had a positive impact on the wider cryptocurrency market, as there has been increased investor sentiment and inflows into spot Bitcoin exchange-traded funds (ETFs).
As of now, BTC is trading at $57,073, showing a 10% increase over the past 24 hours.
The last time Bitcoin traded above $57,000 was over two years ago, on December 2, 2021. However, at that time, the price was already beginning to decline and enter a prolonged bear market. By January 24, 2022, the price had dropped to $32,987, representing a 42% decline from its previous peak.
There are several factors driving the current price movement of BTC. These include consistent inflows into spot Bitcoin ETFs, the upcoming supply halving event, and positive investor sentiment from both retail and institutional investors.
One of the main drivers of Bitcoin’s recent rally is the continued buying by institutional investors. Business intelligence firm MicroStrategy recently announced that it had acquired an additional 3,000 BTC for a total of $155 million. This brings their total holdings to 193,000 BTC, acquired at an average price of $31,544.
In addition, the nine new spot Bitcoin ETFs have accumulated a total of 300,000 BTC, worth $17 billion, since their debut on January 11. The net inflows into these ETFs have now surpassed $6 billion. This means that these ETFs now hold 1.5% of Bitcoin’s maximum supply.
The combination of decreasing supply and strong demand for Bitcoin is expected to drive the price higher in the short term.
Furthermore, the anticipation of the upcoming halving event is also supporting the price of Bitcoin. The halving event, set to occur on April 20, will reduce the reward for mining new blocks on the Bitcoin blockchain from 6.25 BTC to 3.125 BTC per block. This event is seen as a bullish signal for Bitcoin.
As Bitcoin’s halving approaches, investors are rushing to secure their positions in anticipation of the event.
BTC’s rise above $57,000 has also led to an increase in the liquidation of crypto-leveraged positions. Short liquidations in Bitcoin reached approximately $18 million in just 15 minutes when the price surpassed $53,000. Over the past 24 hours, $262 million of short positions and $120 million of long positions have been liquidated.
Market participants expect Bitcoin’s bullish price action to continue, leading to a much-awaited bull run in the wider market.
It is important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research before making any investment or trading decisions.