Bitcoin has achieved a record-breaking price of $69,300, surpassing the peak of the previous bull market by almost two and a half years. After experiencing a prolonged crypto winter since November 2021, Bitcoin entered a new phase of price discovery at the beginning of 2023.
During the price discovery phase, traders and investors typically rely on historical data to guide their decisions. However, with the breach of a new all-time high, there are no established resistance or support levels to provide guidance.
In light of this, Chris Dunn, a seasoned crypto investor and Bitcoin educator, anticipates a domino effect in the short term that will propel the price of Bitcoin even higher. The price of Bitcoin has been steadily climbing over the past year, but since February 16, it has seen significant increases, with mega green candles driving the price up by 25%.
These unexpected surges caught many Bitcoin short traders off-guard, resulting in a massive liquidation of BTC shorts. In just 24 hours on February 27, $161 million worth of BTC shorts were liquidated, and the total damage reached $268 million as short positions were closed. The surge in buying pressure from short liquidations can trigger a short squeeze, driving the price of Bitcoin even higher and increasing volatility in the market.
Another factor contributing to the rapid increase in the price of Bitcoin is the approval of spot Bitcoin exchange-traded funds (ETFs) by the United States Securities and Exchange Commission. These ETFs have seen continuous inflows of capital, with BlackRock’s iShares Bitcoin Trust amassing over $10 billion in assets under management in just over seven weeks. This is in stark contrast to the first U.S. gold-backed ETF, which took two years to reach the same milestone.
According to market analyst Will Clemente, the inflows into Bitcoin ETFs have far surpassed those into gold ETFs. The increasing demand for Bitcoin from these ETFs results in more BTC being purchased from the open market, driving the price even higher.
As the story unfolds, more information will be provided.