Bitcoin (BTC) hit a one-month high of more than $46,000 on Friday.
The recent surge in cryptocurrencies has been driven by steady inflows into various spot-based US funds and expectations surrounding the April halving event. The stock last traded at around $46,246, up 7.3% in the past week.
The new Spot Bitcoin ETF has garnered significant interest with 10 consecutive days of net inflows, reaching $8 billion as of this week, indicating strong investor demand.
This trend is further highlighted by the remarkable performance of two major funds. BlackRock and Fidelity ETFs were among the top 10 inflows in January.
— Eric Balchunas (@EricBalchunas) February 6, 2024
According to a recent Morningstar report, BlackRock’s iShares Bitcoin Trust (IBIT) ranks eighth with approximately $2.6 billion in net flows. Fidelity Wise Origin Bitcoin ETF (FBTC) ranked 10th with $2.2 billion in net flows.
Bitcoin performance before and after Lunar New Year
What lies ahead? Markus Thielen, head of research at 10X Research, noted that the next few days are statistically significant, as the largest cryptocurrencies typically rise by 11% around the Lunar New Year, which begins on February 10.
“For the past nine years, every time a trader would have bought Bitcoin three days before Lunar New Year and sold it 10 days after Lunar New Year began, Bitcoin has gone up,” he said. “This has a 100% accuracy rate.”
“ETF inflows are certainly having an impact. The US still has the largest pool of capital and we are seeing inflows from US institutions,” he added.
Rachel Lin, CEO and co-founder of Singapore-based derivatives trading DEX SynFutures, pointed out that Bitcoin’s weekly closing price has not exceeded $44,000 since March 2022.
“Bitcoin has broken above that level several times over the past two months, but has not been able to close above that level. Therefore, a close above 44,000 by the end of the week could be seen as a bullish sign. “There is,” Lin said.
“While this week has been mostly calm both technically and price-wise, the last few days have seen more exciting price action,” he added. “It will be interesting to see how BTC reacts to the 46,700-46,800 resistance zone. A breakout above this would be a big positive on the long-term chart.”
If it breaks above the moving average, it is a bullish signal
Alex Kupczykevich, senior market analyst at FXPro, said Bitcoin’s rise above its 50-day moving average confirms a bullish trend and should alleviate fears of a major correction.
He said that despite intra-week volatility that caused the price to briefly spike earlier in the year, Bitcoin remained above its December-January closing price level on a weekly basis. However, market analysts believe that the weekly closing price is the more important benchmark.
— CoinMarketCap (@CoinMarketCap) February 9, 2024
Prediction that the price will reach a new all-time high after the halving
Adding momentum to Bitcoin’s rise is the fact that it is attracting the attention of large investors, or “whales,” who are actively collecting Bitcoin. Data from on-chain analytics platform LookOnChain shows significant transactions, including his withdrawal of 2,741 BTC worth about $118 million from Binance before the price spike.
Another factor driving Bitcoin’s rise is the halving event scheduled for April. This event occurs every four years and halves the rewards given to miners who maintain the security of the blockchain.
Personal finance site Finder predicts that Bitcoin will reach an all-time high of $88,000 in 2024. Half of Finder’s experts predict that Bitcoin will reach a new record high six months after the halving event.
“In our industry, we rely on the Bitcoin halving as an indicator to navigate the predictable,” said Pav Hundal, chief market analyst at Swyftx. “We don’t know what the market conditions will be in 2024 from a geopolitical or economic standpoint, but we do know that Bitcoin will become more scarce.”