Bitcoin is approaching its all-time high of $69,000. How will the market fluctuate in the future?

[TL；DR]

⭐️ The craze for Bitcoin continues to rise, approaching its all-time high of $69,000. Its price has surged continuously in the past seven months, and its earnings have led the market.

⭐️ In addition to the promotion of spot Bitcoin ETFs, favorable factors such as the Federal Reserve’s interest rate cut expectations, the restoration of market confidence, innovative iterations of industry technology, and the Bitcoin halving have also contributed to the rise in Bitcoin prices to varying degrees.

⭐️ The current market sentiment is overheated, and there are still potential downward revisions of expectations from various indicators. While enjoying the dividends of the bull market, investors still need to avoid FOMO and try to make reasonable decisions.

Introduction

Bitcoin has skyrocketed one after another, approaching its all-time high of $69,000. This article will give you the latest interpretation of how the market will fluctuate next.

Bitcoin has risen for 7 consecutive months, approaching all-time highs

Since the beginning of this year, Bitcoin has experienced significant gains, with its price rising rapidly and its gains leading the market, triggering a continued trading boom.

After entering March, the upward trend continued. As of the date of writing, the currency price has been rising for 7 consecutive months. Recently, it has exceeded 68,000 US dollars in one fell swoop. It is only 300 US dollars away from the historical high of 69,000 US dollars. It will reach a new high after two years.

Figure 1 Source: Gate.io

In addition, according to data from CoinGlass, as of March 5, the fear and greed index has climbed to 90, and the contract positions on the Bitcoin exchange market have reached 32 billion U.S. dollars, with a liquidation amount of 105 million U.S. dollars within 24 hours.

If compared horizontally, it can better show the good performance of Bitcoin. According to data from Infinite Market Cap, the current total market value of Bitcoin has reached $1.347T, surpassing the market value of silver and rising to the 8th place in the world's major assets, accounting for 9.45% of the total market value of gold. This is a new asset that was born 15 years ago. Generally speaking, the process of value discovery and gaming far exceeds that of traditional assets.

Figure 2 Source: Infinite Market Cap

In short, it is not difficult to see from various data that the current pace of Bitcoin value discovery has accelerated significantly, there is a serious imbalance between long and short in the short term, and the market is very bullish. This once again highlights the activity of the Bitcoin market and investors' prospects for it. optimistic expectations.

The launch of spot ETFs and the fourth halving may be incentives for surges

Bitcoin has been soaring recently, and its surge has even completely broken the pattern of the past two bull markets. Its price surge is supported by multiple factors.

The primary factors are the listing of spot Bitcoin ETFs and the increase in Bitcoin holdings by MSTR and other institutions. This is a structural change in the capital game of Bitcoin's current bull market, and it is also the biggest incentive for the currency price to rise sharply. In January this year, the Chairman of the U.S. Securities and Exchange Commission (SEC) announced that the first batch of Bitcoin ETFs were officially approved and began trading the next day. This major move has greatly lowered the threshold for purchasing Bitcoin, thereby attracting widespread participation from more institutional and retail investors.

As the trading volume of Bitcoin spot ETFs continues to grow, the injection of funds and the market's hype on this information directly form a positive transmission to the rise in Bitcoin prices. In fact, with the successful listing of 11 companies' Bitcoin ETFs, market feedback has been extremely enthusiastic, with trading volume quickly exceeding US$4.4 billion, and the total value of Bitcoin holdings reaching US$54.4 billion, accounting for nearly 4% of the total market value of Bitcoin.

Figure 3 Source: coinglass

In addition, it must be mentioned that the halving event in the history of Bitcoin has always been the focus of market speculation. According to data from Gate.io, Bitcoin will usher in the fourth halving on April 21, which means that every four Annual mining rewards will be reduced by half.

Figure 4 Source: Gate.io

The fourth halving will make the supply hardness of Bitcoin stronger than gold for the first time, which not only highlights the rarity and value of Bitcoin, but also stimulates optimism in the market.

To sum up, Bitcoin’s recent surge is no accident, but the result of a combination of factors. From the approval and listing of spot Bitcoin ETFs to the positive performance of market feedback, to the promotion of the "halving" event and the influence of social media, and even the potential benefits of the Federal Reserve's interest rate cut this year, these factors have jointly promoted the rise of Bitcoin prices. rise.

Long-term bull market journey, short-term volatility intensifies

Although it is difficult to predict the short-term fluctuation direction of Bitcoin at such a critical juncture, it is foreseeable that the rhythm of Bitcoin's fluctuations may not weaken in the short term.

Judging from past historical experience, when Bitcoin breaks through its previous high, it will often lead to a significant downward adjustment. Once the breakthrough is officially confirmed, it will often lead to a carnival of altcoins and enter the Alt Season.

For example, in early January 2017 and late November 2020, Bitcoin approached its all-time high twice, experiencing declines of 30% and 18% respectively.

In fact, since the birth of Bitcoin, its price fluctuations have been violent and have only slowed down this year. This also shows that Bitcoin, as a relatively mature asset class, is deepening its consensus.

Since the beginning of last year, the price of Bitcoin has gradually recovered from the panic of falling below US$16,000. In the following quarter, the price of Bitcoin rebounded and stabilized at around US$30,000, and then fluctuated for nearly half a year. By September 2023, the price of Bitcoin has risen strongly for nearly 7 months, successively exceeding the US$40,000, US$50,000, and US$60,000 mark. Since March this year, the price of Bitcoin has accelerated and is only one step away from the historical high.

Figure 5 Source: @100trillionUSD

However, despite the rising price of Bitcoin, investors still need to be cautious, especially those who have been on the sidelines and should act within their capabilities. The most recent example is that the price of Bitcoin exceeded the US$64,000 mark on February 29, but then quickly fell back, falling by US$5,000 in a few minutes. The increase narrowed from a maximum of 13% to less than 6% at one time. Nearly 180,000 people in the currency market suffered liquidation.

In short, we believe that the approval of Bitcoin ETF not only enhances the legitimacy of crypto assets, but also injects strong external power into the rise of Bitcoin prices, and the upcoming fourth halving will increase the value of Bitcoin. Intrinsic motivation makes Bitcoin’s short-term rise inevitable.

With the current Bitcoin market in full swing, we still believe that the current market sentiment is overheated, and there are still potential downward revisions of expectations from various indicators. Investors still need to avoid FOMO and try to make reasonable decisions while enjoying the dividends of the bull market.

Author: Carl Y

**This article only represents the author’s views and does not constitute any trading advice. **

**The content of this article is original and the copyright belongs to Gate.io. If you need to reprint, please indicate the author and source, otherwise you will be held legally responsible. **