Bitcoin on track to break all time high

The all time high (ATH) for Bitcoin (BTC) is coming close. The cryptocurrency is now only 1,9% away from its peak in 2021. Then the coin was able to surpass the $69.000 price. The exceptional price performance of BTC has introduced many skeptics who believe the coin will crash after its explosive price surge. Can Bitcoin break its ATH this week? 

Faster than anyone expected, the BTC price has been able to near its ATH of over $69.000 before the halving event, which will occur in April of this year. In the past 30 days the price has managed to increase by 60% leaving many investors in awe. The main driver for the explosive price action is the massive inflow into the new Bitcoin Spot Exchange Traded Funds (ETFs) that launched in January of this year. 

For Bitcoin to exceed its current ATH it only needs to increase further by 1,9%, which equals around $1.300. A seemingly easy feat for the biggest cryptocurrency. However, analysts also expect that the selling pressure can be very high at the $69.000 price range as traders and investors expect a large correction. 

Massive Bitcoin ETF inflows 

The main reason for BTC to surpass its ATH this week is the continuous inflow of funds into the Spot ETFs. Last Monday the market saw over half a billion dollars of inflows in just a single day, resulting in Bitcoin breaching the $68.000 price range. As inflows of funds are expected to continue it is likely to expect that the ATH will be breached. 

However, ETFs can also be a cause for a correction. As the funds introduce lots of liquidity into the Bitcoin market the price can also fall down quickly. As investors want to realise their significant BTC gains a market selloff can be triggered where we see possible record outflows of funds. 

BTC miners selling large amounts

At the same time Bitcoin miners are selling massive amounts of coins. As the BTC price is rising, miners want to take profits as their operations are very expensive to maintain. Since October of last year around 24.000 BTC coins have been sold by miners, which are worth over $1,65 billion (as displayed in the figure below).

Figure 1: BTC miner balance over time (source; Glassnode) 

Although the amount sounds high, it is significantly less than the inflow we see in BTC ETFs. As long as the inflow into the funds maintains its current pace it is likely we see a breach of the all time high for Bitcoin. 


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