Why is Bitcoin price rising today? Bull Run or Bull Trap, what’s next for BTC price?
Bitcoin surged above $63,000, a dream it has not achieved in two years, driven by market optimism, increased trading activity and major macroeconomic changes.
Surge unpacking
Bitcoin’s rise to $63,000 marked its biggest monthly gain since December 2020, led by a 42% price rise in February.
The influx of capital into the market due to the recently approved U.S. spot Bitcoin ETF has played a pivotal role in fueling this surge. Notable ETFs, including those offered by Grayscale, Fidelity, and BlackRock, have seen a surge in trading volume, demonstrating growing interest in cryptocurrencies as an asset class.
Traders have strategically entered the Bitcoin market ahead of the halving event scheduled for April. The halving process, designed to slow the launch of cryptocurrencies, has historically triggered significant price increases.
At the same time, the growing likelihood that the Federal Reserve will cut interest rates in the coming months is increasing investors’ preference for high-yielding, volatile assets, further supporting Bitcoin’s upward trajectory.
“Bitcoin is being driven by continued inflow support into new spot ETFs and the prospect of a halving event in April and a Fed rate cut in June,” said Ben Laidler, global markets strategist at eToro.
The big impact of ETFs
The fear and greed index, a key indicator of investor sentiment, soared to 82, heralding extreme greed and hitting the highest level in over a year.
These levels often precede market corrections but indicate an increased appetite for risky and speculative investments. The growing interest in Bitcoin ETFs is evident with trading volume reaching $3.8 billion and a market capitalization approaching $45 billion.
Joseph Edwards, head of research at Enigma Securities, highlighted the accelerating interest in ETFs, suggesting that advisors are actively introducing these investment vehicles to their clients. The unexpected surge in ETF activity, commonly referred to as the “ETF effect,” exceeded expectations, with trading volumes surpassing those of major companies such as Apple, Microsoft, and Nvidia.
Bitcoin’s recovery following the post-ETF downturn highlights its resilience, with a strong bounce defended by its 100-day moving average. The recent break above $50,000 and consolidation near $53,000 have set the stage for another rise in Bitcoin price.
overall…
While optimism prevails, speculation is high that there will be a steep correction after the halving. Nonetheless, the ongoing rally raises the possibility of Bitcoin revisiting its 2021 highs, adding to the dynamic and ever-evolving narrative in the cryptocurrency market.