Bitcoin Price Breaks Past $51,500: 4 Key Reasons

2024-2-14 13:00

On Tuesday, the Bitcoin price plunged from $49,900 to $48,300 following the release of the US inflation data. As NewsBTC reported, the data came in hotter than expected. Instead of 2.9%, headline CPI came in at 3.1%, while the core CPI was even at 3.9% instead of the expected 3.7%.

The traditional financial market reacted negatively and dragged Bitcoin down with it, as expectations for interest rate cuts have shifted further into the future. The prediction markets are now pricing in only 4 rate cuts in 2024 after CPI inflation reached 3.1% in January.

This is a huge drop in expectations as just over a month ago the markets were still pricing in 6 rate cuts. The Fed’s most recent forecast was for 3 rate cuts in 2024. The probability of a rate cut in March is below 10% and the probability of a rate cut in May is falling rapidly.

In contrast to the S&P 500, however, the Bitcoin price showed a strong reaction and quickly rose again to $49,900. The reaction of the Bitcoin market is quite telling for the short-term future. And the Bitcoin price is showing just that today. At press time, BTC rose above $51,500, marking a new yearly high. Here are 4 key reasons:

#1 Record-Breaking Bitcoin ETF Inflows

The surge in Bitcoin ETF inflows marks a pivotal moment for Bitcoin, reflecting a significant shift in investor sentiment and market dynamics. On a record-breaking day on Tuesday, the net inflows into spot Bitcoin ETFs reached $631 million, led by The Nine with an inflow of $704 million, signaling a substantial accumulation of Bitcoin.

Key players like Blackrock and Fidelity played a significant role in this influx, with Blackrock experiencing nearly half a billion dollars ($493 million) in inflows and Fidelity $164 million. The overall net inflow of $2.07 billion over four trading days, averaging over half a billion per day, highlights the staggering sustained demand for Bitcoin.

This demand is notably new capital, as GBTC outflows remained stable at $73 million, indicating these inflows are not merely a rotation from GBTC but represent fresh investments. Matt Hougan, CIO of Bitwise emphasized the significance of this movement:

IMHO the [numbers] undercounts the fundamental new investor demand for these ETFs. People assume all of the money flowing out of GBTC to date is rotating into other bitcoin ETFs. But a good chunk of it is from inorganic holders […] Long-term investors have backfilled that and added $3b more on top. I suspect the real new investor-led new demand is north of $5b, and shows no signs of slowing.

#2 Genesis GBTC Liquidation Concerns Alleviated

Fears of a Bitcoin crash, similar to FTX’s sale of GBTC, triggered by Genesis’ planned liquidation of Grayscale Bitcoin Trust (GBTC) shares have been alleviated, as reported today on Bitcoinist. The liquidation, necessary due to Genesis’ bankruptcy, was initially viewed as a potential market downturn catalyst.

The bankrupt lender needs to liquidate approximately 36 million shares of GBTC, valued at around $1.5 billion, as part of its strategy to resolve financial challenges stemming from significant loans and regulatory settlements.

However, the proposed Chapter 11 settlement involves in-kind repayments to creditors, reducing direct selling pressure on Bitcoin. This strategy aligns with the interests of long-term Bitcoin holders, potentially limiting market volatility. Greg Schvey, CEO at Axoni, highlighted:

The proposed Ch 11 settlement requires Genesis to repay creditors in kind (i.e. bitcoin lenders receive bitcoin in return, rather than USD). […] Notably, in-kind distribution was a priority negotiation topic to prevent long-term BTC holders from recognizing gains when receiving USD back (i.e. a forced sale). This would seem to indicate a substantial volume of lenders don’t plan to sell immediately.

#3 OTC Demand Exceeds Supply

The statement by CryptoQuant CEO Ki Young Ju that “Bitcoin demand exceeds supply at OTC desks currently” is a significant indicator of underlying market strength. OTC transactions, preferred by large institutional investors for their discretion and minimal market impact, are reflecting a robust demand for Bitcoin. This demand-supply imbalance at OTC desks suggests that large players are accumulating Bitcoin, a bullish signal for the cryptocurrency’s price outlook.

#4 Futures And Spot Market Dynamics

The analysis of futures and spot market indicators by @CredibleCrypto sheds light on the technical factors signaling a bullish continuation for Bitcoin. The analyst points out, “Data supporting the idea that that was ‘the dip’. – OI reset back to levels before the last pump – Funding decreasing through this local consolidation – Spot premium is back.”

These observations suggested a healthy market correction rather than the start of a bearish trend, with the reset in open interest and the decrease in funding rates indicating that the market has absorbed the shock and is primed for upward movement.

In conclusion, The combination of record ETF inflows, alleviated concerns over Genesis’ GBTC liquidation, strong OTC demand, and favorable futures and spot market dynamics provides a compelling case for Bitcoin’s potential rally. Each of these factors, supported by expert insights and market data, underscores a growing investor confidence.

Similar to Notcoin - TapSwap on Solana Airdrops In 2024

origin »

ETH/LINK Price Action Candlestick Set (LINKETHPA) на Currencies.ru

$ 467.1 (+0.48%)
Объем 24H $0
Изменеия 24h: 0.85 %, 7d: 17.53 %
Cегодня L: $453.49 - H: $467.1
Капитализация $0 Rank 3676
Доступно / Всего 0 LINKETHPA

came data bitcoin price inflation reported hotter

came data → Результатов: 126


Bitcoin Bounces On Lower Than Expected CPI Data | BTCUSD November 10, 2022

Bitcoin has taken 10% back in a dramatic move following the announcement of October CPI data. CPI came in below expectations, causing a melt up in risk assets including cryptocurrencies. Take a look at the video below: VIDEO: Bitcoin Price Analysis (BTCUSD): November 10, 2022 Before suggesting any type of bottom is in, more downside could still be ahead, with this recent movement being nothing more than a bearish retest.

2022-11-11 21:42


Фото:

Ethereum Foundation Cashed Out A Large Sum Of ETH At The Peak Yet Again

The Ethereum Foundation, the non-profit dedicated to supporting the Ethereum blockchain and its ecosystem, allegedly cashed out a huge sum of ETH at the November top. The findings came to light by Edward Morra, a widely-followed cryptocurrency trader, and technical analyst, who dug into the Foundation’s historical account data. Ethereum Foundation Dumped At The Top […]

2022-1-23 10:01


Фото:

Three Arrows Capital Buys 100,000 ETH In Deal Worth Nearly Half A Billion Dollars, Days After Its CEO Zhu Trashed Ethereum

Three Arrows Capital is holding a hefty amount of Ethereum, despite CEO Su Zhu’s rubbishing claims on the cryptocurrency less than two weeks ago. Zhu’s Firm Did Not Sell Ether; You’re Welcome The rant which came on November 21st interestingly coincided with data on Etherscan showing that the address marked “Three Arrows Capital” on Nansen […]

2021-12-8 23:20


This On-Chain Data Suggests Unannounced Companies are Accumulating Bitcoin

The crypto community was ablaze with joy after news broke regarding Square’s decision to buy Bitcoin to hold as a reserve asset This decision came about just months after MicroStrategy made a similar choice, albeit on a larger scale If this trend gains steam as the dollar continues seeing unprecedented inflation, it could be a catalyst for massive BTC upside The significance of this should not be understated, but data seems to indicate that Square […]

2020-10-10 02:00


Фото:

Binance Issues Statement on ‘False KYC Leak’; CEO Comments

Binance has formally denied that it has lost control of some of its user data as rumors continue to swirl around a possible hack. Hacker ‘Extorting’ Binance In a statement issued August 6, the major cryptocurrency exchange said it was investigating the claims, which revolve around a hacker demanding 300 BTC in return for withholding traders’ personal data, including passports.

2019-8-7 12:06


Фото:

Bitcoin network about to charge its billionth-dollar in transaction fees

The Bitcoin network is approaching its billionth dollar charged in cumulative transaction fees—a threshold due to be broken nearly 10 years after the creation of the original cryptocurrency. The revelation came in a tweet Tuesday by Nic Carter, who expects the network will surpass $1 billion in total cumulative fees this fall based on data […] The post Bitcoin network about to charge its billionth-dollar in transaction fees appeared first on CryptoSlate.

2019-7-31 12:51