Bitcoin surged above $69,000 overnight on Sunday, hitting its highest price in three months. The rally capped Bitcoin’s strongest week in two months and added fuel to excitement in a market already gaining momentum.
With BTC nearing its all-time high of $73,000, market experts are speculating on the possibility of it breaking a new record this year. Here are what analysts say are the key factors driving Bitcoin’s recent rally.
However, today the BTC price experienced a sudden partial decline and is currently trading at $ 67,800. With the decline, there was a liquidation of approximately $ 70 million in the cryptocurrency market, $ 65 million of which were in long positions.
Mena Theodorou, co-founder of cryptocurrency exchange Coinstash, attributes the price increase to rising demand for spot Bitcoin ETFs in the U.S. According to Theodorou, institutional investors bought $2.1 billion worth of Bitcoin ETFs last week alone. This massive inflow was fueled by 36,500 Bitcoins mined, significantly exceeding the daily supply.
“We are seeing investors buying Bitcoin much faster than it is being mined,” Theodorou said.
According to Jonathan de Wet, chief investment officer of crypto trading firm Zerocap, the rising ETF demand is just part of a larger institutional push that could push Bitcoin to new highs.
“Institutionalization is the short-term catalyst that is taking us above all-time highs, and monetary policy needs to be eased through 2025 to follow,” De Wet said. He also cited MicroStrategy’s ambition to be a Bitcoin bank and the SEC’s approval of options on Bitcoin ETFs as critical factors contributing to this institutional momentum.
Last week, U.S. stocks and gold trading hit all-time highs, while concerns about U.S. public debt, which has risen by nearly half a trillion dollars since last month, prompted investors to seek riskier assets, with Bitcoin being a prime target.
Analysts at crypto ETPs provider ETC Group noted that bullish sentiment has returned to the market. They cited the Crypto Asset Sentiment Index, which reached its highest point since March. At its peak in March, the crypto market cap exceeded $2.8 trillion, with Bitcoin trading above $73,000.
“Bitcoin is increasingly viewed as an alternative asset to U.S. Treasury bonds, which may have contributed to the recent rally in the price of Bitcoin and other crypto assets,” ETC Group analysts wrote.
Despite the optimistic outlook, Bitcoin remains vulnerable to market volatility and geopolitical influences. Analysts note that approximately $5.5 billion worth of Bitcoin options are set to expire on October 25, representing the second-largest Bitcoin option expiration to date.
Analysts at CEX.IO, a crypto exchange, warned that if Bitcoin’s upward momentum fades, this key options expiration could send its price down to around $64,000. However, they also suggested that a break above $70,000 could force options sellers to buy more Bitcoin, potentially fueling further bullish momentum.
Bitcoin’s historical tendency to perform well in the fourth quarter could also play a role, Theodorou added. “It looks like it’s going to be a big week for crypto markets,” he said.
*This is not investment advice.
