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Bitcoin beats selling pressure

Bitcoin beats selling pressure to break $70,000

Tue, 03/19/2024 - 08:09

Crypto is back in the headlines yet again, as the existing bull run appears to have picked up even more momentum in recent weeks. After breaking through its key resistance of $65,000 to create a new all-time high just over a week ago (5 March), Bitcoin has already smashed through the $70,000 mark and sits at $72,720 at the time of writing on 14 March. But this rally has been going on much longer than a matter of weeks – BTC has been on a steady upward trend since November 2023, even if the media has only recently picked up on this latest run. This time around, there have been some solid fundamentals driving the growth as opposed to mere speculation: the approval of several spot Bitcoin ETFs and the upcoming halving being the big ones.

However, amid sell-offs by crypto whales and miners against a backdrop of continued gains and growing coverage by mainstream media outlets, some digital currency insiders are beginning to wonder whether a bubble could be developing. So, where is Bitcoin and the wider market headed during the rest of 2024, and what will be the key factors for growth?

It's all about balance

While it's true that we've seen some high-profile selling since Bitcoin topped its previous best last week, much of this can be explained by established market maxims and shouldn't be taken as cause for serious concern. First, the sell-off by long-term HODLers that sparked a full 10% correction immediately after the new ATH was set can be attributed to normal profit-taking. It's perfectly reasonable for someone who bought at an average price of, say, $15,000 to decide to cash in some of those gains when a new high is reached. As we've seen from BTC's continued growth above $70,000, there was plenty of demand to counteract that fresh supply. 

Now, rumour has it that mining firms are the ones selling large volumes of BTC. However, as CryptoQuant CEO Ki Young Ju was quick to point out, many of these "are likely offshore or older miners" and not US-based ones. But once again, this in no way indicates that they're expecting a crash. Instead, it's much more likely that they are using the proceeds to purchase more advanced equipment ahead of the upcoming halving. As with any market, however, it is all about supply and demand. Once again, we've seen more than enough takers for the incoming coins among retail investors and ETF funds. In fact, Ju went as far as to state that the “bull market would continue unless ETF inflows slow down.” 

Let's stay positive

Amid all the unbounded optimism and with the knowledge of what has happened in previous Bitcoin bull markets, it's understandable that some are bracing for a crash. However, we always have to analyse each situation based on its own merits. As we've already hinted, this time, things are slightly different. There is much more institutional money in the game (over $1 billion in inflows in 2023), and this trend is only increasing as interest in the new spot Bitcoin ETFs grows.

The impact of these products should not be underestimated: Not only are they attracting previously reluctant investors on account of their easy accessibility, but they're also making their way into the portfolios of traditional investment and pension funds. In addition to increasing the credibility of Bitcoin, this will work to reduce volatility since such investors typically have longer-term outlooks. We've also got to take into account the impending halving, which is expected to occur sometime next month when the block height reaches 840,000. If the history of previous halvings (2012, 2017 and 2020) is anything to go on, we can expect to see significant price increases within the six months following the event.

Even if these have already been priced in to some extent, it would be highly surprising if no new gains were realised. After all, the mining firms buying new equipment must have run projections that were convincing enough to secure the finance for their investment. Indeed, famous Bitcoin bull Cathie Wood of Ark Invest has even brought forward the target date of her $1 million BTC prediction. 

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