Bitcoin’s price has surged over 5% in the past 24 hours, reaching $71,000 for the first time since early June, bringing the cryptocurrency closer to its record high of $73,000. This impressive rally has had a notable impact on the broader crypto market, leading to a 3% increase in total market capitalization to around $2.51 trillion. In the last 24 hours, this price jump has also resulted in liquidations exceeding $241 million, primarily involving short sellers on major exchanges like Binance and OKX.
So, what factors are driving Bitcoin’s latest surge, and can this bullish trend continue as we close out October? Let’s break down the key factors fueling today’s Bitcoin rally and whether they might sustain Bitcoin’s upward trajectory.
Today’s Bitcoin rally appears to be primarily fueled by increased demand from large institutional investors, or “whales,” who are buying heavily amid current macroeconomic uncertainties. Many of these investors view Bitcoin as a hedge against inflation and the devaluation of traditional fiat currencies, which are under pressure from global conflicts and market instability.
Recent data from the crypto market indicates that Bitcoin’s supply on centralized exchanges fell by over 7,000 BTC in the past 24 hours, highlighting a trend where investors are moving Bitcoin off exchanges, typically a bullish sign.
Another major driver is the liquidation of short positions, which are trades betting on Bitcoin’s price decline. In the past 24 hours, an extensive number of short traders have been forced to close their positions due to rising prices, creating a “short squeeze.” This event adds upward pressure on Bitcoin’s price, further supported by bullish sentiment from whale traders entering the market.
U.S. spot Bitcoin ETFs have also played a pivotal role in the latest price surge. Led by major players like BlackRock’s iShares Bitcoin Trust (IBIT), these funds have recorded substantial cash inflows in recent days. On Monday alone, Bitcoin ETFs in the U.S. registered more than $479 million in net inflows, indicating that institutional and retail investors alike are betting on Bitcoin’s long-term value.
This demand for Bitcoin ETFs is being driven by increased confidence in Bitcoin’s ability to act as a hedge against market volatility and inflation. With a wider selection of ETFs providing easier access to Bitcoin for traditional investors, more capital is entering the crypto market, contributing to the recent price rally.
Technical analysis by seasoned traders also indicates that Bitcoin’s price might be setting the stage for further gains. Prominent trader Peter Brandt noted that Bitcoin recently broke above a longstanding downtrend line on the logarithmic chart, confirming a new upward trend. Brandt emphasized that with Bitcoin’s price moving above July’s peak, it has formed a so-called “golden cross” — where the 50-day moving average crosses above the 200-day moving average, often seen as a bullish signal in technical analysis.
With these technical indicators aligning, Brandt is optimistic that Bitcoin could aim for even higher targets, potentially reaching as high as $94,000 in the near term if this bullish momentum sustains.
The timing of Bitcoin’s rally also coincides with a favorable macroeconomic outlook. As October comes to a close, market sentiment remains strong with the expectation that the U.S. Federal Reserve may cut interest rates next week. Such a move would likely encourage additional investment in riskier assets, including cryptocurrencies, as lower interest rates tend to make traditional savings less attractive.
Moreover, with the 2024 U.S. presidential and congressional elections around the corner, Bitcoin’s price gains have been linked to political sentiment as well. Former President Donald Trump, who has garnered support within the crypto community due to his favorable stance on digital assets, currently leads in the polls. His possible return to office is being closely watched by Bitcoin advocates who anticipate that his policies could positively influence the regulatory environment for cryptocurrencies.
Gold’s recent performance has also had a complementary effect on Bitcoin’s appeal. Gold has entered price discovery, achieving record highs, and Bitcoin is viewed by many investors as “digital gold,” reinforcing its appeal as a store of value.
Bitcoin’s surge past $71,000 has certainly set an optimistic tone as we head into November. However, the next few weeks will be crucial in determining whether this rally will continue or if Bitcoin will encounter resistance at current levels.
The interplay between continued demand from large investors, upcoming macroeconomic tells, and the results of the U.S. election will be pivotal in shaping Bitcoin’s price movement. With so many variables at play, analysts advise investors to brace for potential volatility.
For now, technical indicators and whale activity point to a continuation of bullish momentum, particularly if Bitcoin can maintain its position above key support levels and break through resistance at $73,000. Additionally, increased institutional adoption, driven by ETF inflows and strategic buying from large investors, adds strength to the case for Bitcoin’s sustained rally. However, investors should remain cautious, as any unexpected changes in economic or political dynamics could trigger a reversal.
Bitcoin’s path forward may be shaped by these combined factors, and while the outlook remains optimistic, only time will tell if the flagship cryptocurrency can reach new heights or stabilize after this October’s impressive surge.
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