Bitcoin (BTC) price defied gravity once again on Wednesday, breaking the critical $51,000 barrier and briefly touching $52,000 to reclaim its “throne” with a market cap of $1 trillion. However, this upward trend was not without losses. Because millions of short positions were liquidated in a dramatic price explosion. So the bears scrambled for cover. Here are the details
Bitcoin price rose
The rise was fueled by several powerful factors. Continued optimism about Bitcoin’s future growth was critical. Additionally, bullish option bets targeting $75,000 attracted attention. Finally, the critical factor has been increased demand from spot Bitcoin exchange-traded funds (ETFs). BlackRock’s IBIT ETF, for example, witnessed net inflows of nearly $500 million on Tuesday, revealing investors’ appetite for the leading cryptocurrency.
Price action is exciting. In a two-hour window, Bitcoin surged above $51,000 and broke above $1,500, stunning short sellers. Data reveals that 97% of all positions liquidated during this period were short sales, highlighting the dominance of buyers in the current market environment. The pain of short traders has also spread to altcoins. Because Ethereum repeated Bitcoin’s rise and rose above $ 2,700.
Is $52,000 the new resistance level?
But Bitcoin’s progress faces a new obstacle. The hurdle is a “dense” wall of resistance near $52,000. Analyst Cole Garner stated that the source of this liquidity obstacle is Bitfinex, one of the leading crypto exchanges. Despite the recent launch of US spot Bitcoin ETFs, which theoretically consume more BTC than is mined, this “brick wall” of demand poses a significant challenge.
Garner also said that Bitfinex is renewing this resistance level at an alarming rate. On the other hand, he noted that it has potentially outweighed the buying pressure from ETFs. This raises concerns about potential manipulation, as similar behavior from Bitfinex has been observed in the past, most notably during its 2020 price surge from $3,000 to $10,000.
Record inflows in ETFs
Despite the impending resistance, there are encouraging signs. Bitcoin ETFs witnessed record daily inflows, exceeding $600 million on February 13. BlackRock’s product alone contributed nearly half a billion dollars. Additionally, the significant reduction in outflows from Grayscale Bitcoin Trust (GBTC) is critical. Because it shows that fresh money is entering the market instead of domestic investors mixing.
In conclusion, Bitcoin’s recent rally demonstrates the cryptocurrency’s resilience and increased confidence in its long-term potential. Challenges such as the Bitfinex liquidity wall remain. However, increasing demand from institutional investors and spot ETFs paints a bright picture for the future. It remains to be seen whether Bitcoin can overcome this hurdle and break the $52,000 resistance, but one thing is for sure: The battle for crypto supremacy is not over yet and all eyes are on Bitcoin’s next move.
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