The price of Bitcoin (BTC) has seen a promising surge this week, breaking past the crucial resistance point of $97,000 and achieving its highest level since February. At its last recorded rate on Saturday, BTC was trading around $96,500, which represents a significant 30% rise from its lowest point in April. This upward trend sparks curiosity around the main factors that could potentially catalyze Bitcoin’s surge to a new all-time high in the current year.
The first bullish element worthy of note is the steep decline in the supply of Bitcoin on exchanges, which has dropped to 1.42 million, a record low in over six years. This is the smallest quantity of coins on centralized exchanges since November 2018, when the supply was at its peak with 3.21 million. Concurrently, data reveals that the supply of Bitcoin outside of exchanges has seen a leap to 18.43 million. These figures suggest that investors are holding onto their coins, which could trigger a supply squeeze if the demand continues to rise.
Major Bitcoin holders, including Michael Saylor’s Strategy, which owns over 2% of the total supply, have shown no signs of selling. Similarly, leading companies like Coinbase, Tesla, Galaxy Digital, and Block have made no suggestions of planning to sell.
Another key factor contributing to the potential rise in Bitcoin’s price is the increasing demand from retail and institutional investors. One indicator of this is the inflow into Bitcoin exchange-traded funds (ETFs). Data from SoSoValue reveals that since their institution in January last year, Bitcoin ETFs have experienced outflows in just four months. These funds have collectively added over $40 billion in assets. Blackrock’s IBIT is now worth $60 billion, while Fidelity’s FBTC and Ark Invest’s ARKB stand at $20 billion and $19 billion respectively.
These surging ETF inflows are indicative of the growing institutional demand in the U.S. Moreover, there are indications that the next wave of demand could come from countries looking to diversify from the U.S. dollar.
These supply and demand dynamics have led analysts to express strong optimism about Bitcoin. Standard Chartered analysts are forecasting a rise to $200,000, while Ark Invest anticipates it could reach $2.4 million by 2030.
On a technical level, Bitcoin’s price shows strong potential for further growth. It has maintained a position above the ascending trendline, connecting the lowest swings since August 5 last year. Bitcoin has also surpassed the key resistance level of $88,690, the neckline of the double-bottom pattern, and the 50-day and 100-day Exponential Moving Averages.
These factors suggest that Bitcoin is gaining momentum, potentially propelling it over the $100,000 mark and onward to its all-time high. As trade tensions continue to ease, demand for Bitcoin is also expected to rise.
