Bitcoin experienced a significant surge in price, surpassing $64,000 on February 28th, marking a new high for 2024. The majority of this month’s price movement, which amounted to a 50% increase, is believed to be driven by investors’ anticipation of the upcoming supply halving event, typically resulting in a strong upward price movement.
In addition, the steady influx of funds into newly launched spot Bitcoin exchange-traded funds (ETFs) is also believed to be a crucial factor influencing Bitcoin’s price action.
However, some technical analysts have expressed concerns about Bitcoin’s market structure and the high funding rates across the market, indicating a heavy reliance on leverage that may eventually lead to a correction driven by liquidations.
Despite these warnings, options analysts are dismissing claims that the price surge is overextended and asserting that the current rally in Bitcoin’s price has the potential to continue.
Chris Newhouse, an analyst, supports this perspective by citing data from Bitcoin’s options markets, open interest, and funding rates.
Another independent market analyst, Nunya Bizniz, adds to the bullish outlook on Bitcoin’s price by pointing out that the relative strength index (RSI) for Bitcoin is above 70. He highlights that in previous market cycles, when the RSI surpassed this level, the price of Bitcoin remained in an upward trend for at least 335 days.
However, shortly after reaching the $64,000 mark, Bitcoin experienced a flash crash, dropping to $58,700. This sudden dip was likely caused by a sell wall at that level and the clearing out of leveraged long positions. Nevertheless, at the time of publishing, Bitcoin had managed to recover nearly 5% of the losses.
Bitcoin is currently less than 13% away from its all-time high, and both retail and institutional investors are optimistic that the record-breaking level of $68,900 will be surpassed before the supply halving event, which is expected to take place in approximately 52 days.
It is important to note that this article does not provide investment advice or recommendations. Investing and trading carry inherent risks, and readers are advised to conduct their own research before making any decisions.