Bitcoin (BTC) Hits New All-Time High at $71K: Unveiling the Main Factors Driving the Surge
In the early hours of March 11, Bitcoin experienced a sudden and significant surge, propelling its price from $69,000 to $71,500. This surge marks a new all-time high for the leading cryptocurrency.
Despite the impressive increase, investors are feeling uncertain. There is a prevailing sense of short-term negativity and skepticism, with many speculating that Bitcoin may undergo another correction, potentially dropping below the $70,000 mark.
Data from IntoTheBlock reveals that the majority of Bitcoin holders purchased their coins at an average price of $465,200. If these investors continue to hold onto their Bitcoin, it is possible that the price will avoid a correction. However, if the support level of $70,000 is breached, prices could decline towards $63,000 or even lower. Bitcoin is currently in a precarious position as it faces the risk of being sold at critical price levels, while also being continuously bought by exchange-traded funds (ETFs).
The impact of ETF purchases has surprised many, causing even long-term Bitcoin enthusiasts to reconsider their price predictions. Some now believe that a short-term estimate of $100,000 is too conservative. Conversely, there are concerns that the rapid price rise could lead to an earlier-than-expected peak, subsequently making the next bear market more severe.
In the coming days, important reports on the US economy, such as the Consumer Price Index (CPI) and Producer Price Index (PPI) for February, are expected. These reports could influence the decisions of the Federal Reserve regarding interest rates and are of significant importance to Bitcoin. Miners are striving to maximize profits before the halving event in April.
This week, attention will be focused on tracking the amount of Bitcoin purchased by spot ETFs. While large investors are enthusiastic about this development, there is also some apprehension that future demand for ETFs may decrease. Cathie Wood, for example, has suggested that the notion of Bitcoin reaching $1 million may have been too conservative.
Tags: Bitcoin, Price Analysis