3 reasons why the price of Bitcoin has increased today
The price of BTC rose above $70,000 for the first time in a week, recovering from negative flows in BTC exchange-traded funds (ETF) last week.
According to data from Cointelegraph Markets Pro and TradingView, the price of BTC rose from $67,212 to $70,306 intraday on March 25, 2010.
Bitcon's recovery follows a price decline that saw the cryptocurrency fall to $60,771, which was backed by negative ETF returns. Could the rise in multiple BTC price metrics be a sign of things to come?
The Bitcoin ETF that goes into the space every week has reached a total of 904 million dollars
Last week marked the “end of a 7-week cycle,” according to a March 25 CoinShares report, with investors entering crypto investment products pulling out more than $942 million.
The report noted last week that “initial outflows totaled $12.3 billion following a 7-week inflow.”
The crypto asset management firm attributed the biggest outflow to the recent crypto price drop, which “wiped US$10 billion from total assets under management (AuM), leaving US$88bn at the peak of the cycle”.
CoinShares analyst James Butterfill said:
“We believe the recent price correction has led to hesitancy from investors, leading to lower inflows to new ETF issuers in the US, which saw inflows of US$1.1bn, partially offsetting existing greyscale's high US$2bn outflows last week.
The weak sentiment was mostly focused on Bitcoin, which accounted for “96% of the flow,” totaling $904 million.
According to Bloomberg analyst James Seifert, the large flow witnessed by Bitcoin ETFs last week may have been due to the sale of GBTC shares by insolvent lender Genesis.
Spike is the measure used in the Bitcoin era
Bitcoin has experienced a significant increase in its usage rate in recent days. According to data from market intelligence firm Sentiment, the number of BTC addresses active on March 23rd rose to 162.89 million, the highest in more than two years.
Age consumption is a metric that tracks the activity of previously idle BTC coins. The scale shows addresses that exchange BTC daily multiplied by the number of days they have moved. Spills indicate that price volatility may increase.
This increase in Age Consumed suggests that previously dormant addresses containing Bitcoin are now re-entering their circulation, indicating a resurgence in network activity. This is confirmed by the increase in transaction volume as shown in the chart below.
As Bitcoin's Age Consumed scale grows, transaction volume will increase, leading to potential price increases in BTC value.
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Is the altcoin season coming?
A CoinShares report noted that altcoins “performed well” last week, “seeing a net inflow of US$16m.” The most popular were Polkadot (DOT) with $5 million in revenue, Avalanche (AVAX) with $2.9 million and Litecoin (LTC) with $2 million.
As such, several large-cap altcoins have outperformed Bitcoin in the past week. BNB Chains' BNB, Dogecoin (DOGE) and Toncoin (TON, which gained 7%, 20% and 46% over the past seven days) led the way, according to data from CoinMarketCap.
Although Bitcoin only increased by 4.5% during the same period, it outperformed most altcoins during the same period, including Ethereum.
At the time of publication, the total crypto market rests at $1.191 trillion, which is 43% below the peak of $1.707 reached in November 2021.
The weekly relative strength index is in overbought territory at 83, which suggests that the altcoin market is still bullish.
Independent analyst and X user Chief Rath notes these overbought conditions and says that a test of support is likely at $960 billion, although he expects “the #altcoins market cap to make a new ATH in 2024.”
“For now, we are moving into the middle range. Resistance 1.25T, $960B support.
Adding to this, popular analyst Sheldon The Sniper said, “BTC's squeeze and decline in dominance will create a mega altcoin squeeze and rally,” saying the market is “one step closer to a true altseason.”
However, data from CoinMarketCap shows that BTC still dominates the market with 51.77%. Moreover, the Altcoin Season Index at Blockchain Center has dropped to 49, which means that the altcoin season is not here yet.
The Blockchain Center says that an altcoin season can only be declared when “75% of the top 50 coins have outperformed Bitcoin over the past season (90 days).”
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
