This price increase is cyclical in nature and the 7 signals below show that it is just the beginning.

Just 3 weeks ago, on February 12, the price of Bitcoin surpassed $50,000. From there, Head of Digital Strategy Sean Farrell of Fundstrat Global Advisors commented:

"This price increase in the near future certainly has a lot of room to continue."

And he was right!

Spot price increases on exchanges took BTC up to $70,000 on March 5, before falling back to current levels. So, after surpassing $50,000, the rally certainly has room to continue.

BTC 4-hour price chart | Source: Tradingview

But here are seven signs that there's still room to run after reclaiming its all-time high for the first time in just under 2.5 years.

The Fed's interest rates haven't even come down yet

Bitcoin prices are skyrocketing to new all-time highs, and US federal funds borrowing rates for US dollars have not even begun to decline. The last time Bitcoin prices rose this high was when the dollar supply was high and the Fed kept interest rates low. This time, the cryptocurrency king has done it without low interest rates.

James Butterfill, head of research at digital asset management firm CoinShares, recently shared that “price increases have coincided with a period of sky-high interest rates, suggesting that the surge in demand is largely due to Excess cash looking for a place to land.”

When this changes, most likely by 2024, Bitcoin's deflationary haven will become a major source of demand for the cryptocurrency while it enjoys the same investment surge that tech stocks have. benefit from excess cash and cheap loans with low interest rates.

First $20,000 Monthly Candle for Bitcoin

Bitcoin set its first $20,000 monthly candle in February, a promising milestone and hint at the possibility of sudden price movements to come.

As a result, a leading on-chain analyst at Glassnode wrote:

“Unreal… February 2024 set a $19,840 Bitcoin candlestick, recording the largest monthly dollar gain in history. This added $390 billion to the Bitcoin market capitalization… A notable increase of 47%.”

Source: Checkmatey

Bitcoin trading decreased over the weekend

According to data analytics firm Kaiko Research in its late February report, weekend crypto trading continued to decline as a percentage of weekly volume:

“However, this trend has been present for a long time: the proportion of BTC traded on weekends decreased significantly over the past 6 years, from 24% in 2018 to just 17% in 2023.”

Source: Kaiko

That could very well indicate greater cryptocurrency adoption and usage from institutions operating during business hours Monday through Friday.

This trend also continues in 2024:

“So far in 2024, only 13% of all BTC transactions from January 1 to February 20 were conducted on weekends. Analyzing this by region, weekend trading is down on both foreign and available US exchanges.”

Additionally, the drop from 17% to 13% also shows the huge impact of Bitcoin spot exchange-traded funds (ETFs) on the market.

Coinbase's overheating price increase

The sudden surge in Bitcoin price occurred when the halving had not yet arrived and the high volume paralyzed Coinbase. The San Francisco-based exchange shut down operations in late February as the cryptocurrency market heated up.

The platform shut down after being unable to handle the requested volume. Therefore, the technical glitch also caused the account holder to know that the balance in their account was zero.

CEO Brian Armstrong has posted:

“The applications are now recovering. We modeled a ~10x increase in traffic and tested the load. This number exceeds that number. Maintaining over-service provisioning will be costly, but we will need to continue working on solutions that automatically scale and eliminate any remaining bottlenecks.”

The outage occurred shortly after the price of Bitcoin topped $60,000 on the exchange, the highest it has been since 2021. After news of Coinbase's shutdown began spreading on social media meeting that Wednesday afternoon, Bitcoin lost about $2,800 in value.

A whale withdrew $1 billion from Coinbase

According to Santiment, early on March 1, a whale withdrew 16,000 BTC worth $1 billion from the Coinbase exchange.

That represents extremely bullish sentiment for Bitcoin. Even as the leading cryptocurrency reached its previous all-time high, this whale was not interested in selling. Furthermore, they are not alone.

In February, whales moved more than $1 billion worth of Bitcoin out of Coinbase. Now they can sell for a profit, but they seem to think the price will go higher on the next leg.

Overall, the number of Bitcoins on exchanges has dropped to a six-year low, and the trend shows no signs of stopping after the multi-billion dollar withdrawal.

That shows high conviction, long-term vision, and huge global support for the future price of BTC.

Bitcoin ETF currently owns 4% of the supply

According to data from BitMEX, spot Bitcoin ETFs held 776,464 BTC at the turn of March. That represents a whopping 4% of all available Bitcoin. Thus, the ETF market managed by Wall Street has just acquired a large portion of the on-chain Bitcoin supply in less than two months.

That seems completely different from Arthur Hayes' nightmare scenario in which ETFs “could destroy” Bitcoin. This was a huge hit for Bitcoin in less than two months, enough to herald a violent supply and demand shock that provided major support for the skyrocketing price.

Head of research Zach Pandl of Grayscale Investments said:

“There simply isn't enough Bitcoin to satisfy all the new demand and so natural supply/demand dynamics are pushing prices higher.”

The US Congress floated allowing banks to deposit Bitcoin

ETFs will fight for Bitcoin with retail investors. Furthermore, banks may soon join the Bitcoin fray and push scarcity and prices to new heights.

On the U.S. House Financial Services Committee, Congressman Mike Flood (R-NE) recently introduced a resolution “to ensure consumers are protected by eliminating barriers that prevent banks from being Strictly managed to become a digital asset custody organization.

First, ETF issuers and now major regulated banks will soon be able to custody Bitcoin, contributing to the global scarcity of the 21 million BTC issued. Accordingly, the supply and demand shock continues.



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