Bitcoin (BTC) has surpassed $71,000 for the first time since March 15, as capital flows into spot BTC ETFs turned positive. In the past 24 hours, BTC has risen over 0.55%, reaching a weekly high at $71,582 on March 26. The current price movement of BTC is fueled by several factors, including consistent spot Bitcoin ETF inflows, the upcoming Bitcoin halving, and positive investor sentiment among institutional investors.
One of the factors behind Bitcoin’s rally is the accumulation of BTC by large investors in anticipation of future price increases. Data from market intelligence firm Santiment shows that the percentage of wallets holding between 1,000 and 10,000 BTC has increased from 23% on January 1 to 25.17% on March 26. Additionally, the percentage of wallets holding between 10,000 and 100,000 BTC saw a spike from 11.68% on March 2 to 12.42% on March 21 before slightly dropping to 11.98%.
This accumulation by Bitcoin whales is supported by a decrease in BTC deposits on exchanges. According to Glassnode data, the number of deposit transactions to known exchange wallets started decreasing on March 5 when BTC’s price climbed above $69,000. This trend continued on March 19, despite a 9% price drop, with deposits to exchanges declining from 109,420 transactions to 55,505 on March 25. The decreasing transfer of BTC to exchanges suggests a lack of intent to sell, which is generally seen as a bullish sign.
Moreover, there has been an increase in the number of whales transferring Bitcoin from exchanges to self-custody wallets. On March 11, several transactions were flagged by blockchain tracker and analytics firm Whale Alert, transferring large amounts of BTC from exchanges to self-custody wallets. On March 25, one holder transferred 2,400 BTC worth $169.5 million from Coinbase to an unknown new wallet, while another whale withdrew 4,797 BTC worth about $339 million from Coinbase to an unknown wallet.
The upcoming Bitcoin halving event is also contributing to the increase in Bitcoin’s price. Market data provider Glassdione stated in a recent report that the significant buying power of ETFs is set to overshadow the traditional supply squeeze effect expected from the halving event, which is scheduled for April this year. Glassnode analyst Marcin Miłosierny emphasized the influence of long-term holders (LTHs) on Bitcoin’s supply dynamics and advised traders to closely monitor their activity as their decisions to sell or hold can significantly impact market liquidity and sentiment.
Bitcoin traders and analysts are now focusing on the next level for BTC after its rally back above $70,000. Data from IntoTheBlock shows that whales added over 80,000 BTC when the price dropped to $64,000, indicating the momentum behind Bitcoin’s move back to the $70,000 range. The firm’s In/Out of the Money Around Price (IOMAP) model reveals that BTC has strong support around the $64,000 level compared to the resistance it faces in its recovery path.
In conclusion, Bitcoin’s price surge above $71,000 is driven by factors such as spot Bitcoin ETF inflows, the upcoming halving event, and positive investor sentiment. Large investors are accumulating BTC, leading to a decrease in BTC deposits on exchanges and an increase in transfers to self-custody wallets. As the halving event approaches, investors are positioning themselves for potential price increases. Traders are now focused on maintaining the price above $70,000, with $100,000 becoming the next target for the BTC price.