2024-3-7 15:30 |
On Tuesday morning Bitcoin set a new all-time high of $69,300, which it managed to hold for approximately two minutes before sharply correcting 10% to $59,300. By Wednesday night Bitcoin had recovered to $67,300 completing another fascinating, volatility-filled 48 hours in the crypto markets.
The sell pressure was partly driven by profit-taking at new highs with miners offloading some of their holdings. The return to the past all-time high awoke a dormant whale who sent 1,000 BTC ($67.1 million) to Coinbase and sold it immediately. The whale mined this Bitcoin in 2010, booking a profit of more than $60 million.
Larger traders had laid a trap at the ATH level of $69,000, and were ready to pounce on over-leveraged longs. As crypto trader Hodlonaut said on X, “This was a case of big whales moving the market like a wave, sending thousands of over-leveraged or under-informed small fish into their mouths.”
The dump to $59,300 led to $1.1 billion in liquidations, with the majority of these long positions, making it the largest liquidation day since the previous cycle top. The result is that market structure is healthier, with funding rates reset, and the Fear and Greed index is now 75, (Greed) down from 90 (Extreme Greed).
Despite the recent selling, profit-taking, and price crash, most holders continue to HODL. Glassnoode reports that 45% of Bitcoin hasn’t moved in over three years, while 11% has not been touched for five to seven years. While sentiment dipped sharply following the crash, the market has recovered extraordinarily quickly, indicating strong demand for Bitcoin, and a resilient market, with consistently strong inflows into the spot Bitcoin exchange-traded funds with BlackRock clocking over $760 million on Tuesday.
Bitcoin ETFs Continue To Drive BTC PriceThe Bitcoin spot exchange-traded funds (ETF) saw a record $10 billion in trading volume on March 5th as investors bought both the ATH and the dip. “These are bananas numbers for ETFs under two months old,” Bloomberg ETF analyst Eric Balchunas wrote on X. ”As a result of the record ETF flows, the BlackRock ETF now holds more than 183,000 Bitcoin, closing in on MicroStrategy’s 193,000.
An impressive month-long price run saw Bitcoin go from $38,000 at the end of January to break the previous all-time high of $68,900.00 earlier this week. The new all-time high pips the previous record high from November 2021, and completes a long rally that saw Bitcoin appreciate in value by 190% over the last 12 months.
Bitcoin’s record price run completes an impressive comeback after a brutal bear market and an unfortunate string of bankruptcies, and fraud cases during the past two years. Most other cryptocurrencies, including memecoins have also benefited from the rally across the crypto market.
The run back to new all-time highs was triggered by the approval of a number of Bitcoin Spot ETFs in the U.S. offered by big financial names such as Fidelity and BlackRock. Eric Balchunas, Bloomberg ETF analyst said, “Today is a big moment for Bitcoin but I’d argue just as big a moment for ETFs. The move from 25k to 69k was all or close to all due to ETF approval hopes and/or flows and arguably warranted IMO, ETFs (and its ecosystem) so damn good at taking something and making it liquid, cheap, convenient and standardized. Both the ETFs and Bitcoin mutually benefit one another.”
Source: Bloomberg
There was no time to celebrate, however, as the new all-time high was immediately followed by a sharp sell-off as traders locked in profits and Bitcoin fell to $66,000, a price not seen since Monday.
https://bravenewcoin.com/data-and-charts/indices/blx
A wild week for the Bitcoin price – Source: Brave New Coin Bitcoin Liquid Index
“It’s perfectly normal for Bitcoin to pull back from the all-time high (this happens every cycle),” wrote Bitcoin analyst Vijay Boyapati on X. “Large sellers use the anticipation of the moment to dump into a high liquidity moment. Importantly the psychological wall is broken and true price discovery will eventually begin.”
Also of note, is that this is the first time that Bitcoin has achieved a new all-time high before the Bitcoin halving event. Popular Technical analyst Rekt Capital said, “In previous cycles, BTC/USD took around 500 days to hit new all-time highs after a halving. Something to consider as we enter a new era for Bitcoin’s price action — we’ve never really seen price action like this before.”
Finally, a note of caution from BlockTower’s CEO Ari Paul. Paul wrote on X today, “Every crypto cycle, I turn pessimistic Cassandra around here (in public warnings). My best guess is that today equates not to October 2021, but more like January 2021. Still think we have 4 innings left in the 9 inning bull market, but… time to start steeling the backbone and psychologically preparing to do a really hard thing – to turn bearish when (almost) everyone is losing their minds as max bullish and the news is purely positive. And also worth noting… we’re *already* in a bubble by many metrics. Plenty of risks already, particularly in more speculative plays. For clarity – I’m just starting to *prepare* psychologically to be bearish. The right time might be 2 years away, but I find game-planning and ‘practicing’ contrarian thinking to be critical to making the right contrarian call in real-time.”
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