Bitcoin (BTC) price has surpassed the $50,000 mark for the first time since the spot Bitcoin exchange-traded fund (ETF) was approved in the United States. The flagship coin hit a nearly 24-month high of around $50,380 in the early Asian session on Tuesday, after surging 4% in the past 24 hours.
As a result, over $74 million from Bitcoin derivatives was liquidated in the past 24 hours. Despite calls for a recent market correction, a notable rise in Bitcoin value has reinvigorated overall bullish sentiment. It also issued a red alert after the 30-day market value to realized value (MVRV) ratio exceeded 11.50% for the first time in two years.
Main reasons why Bitcoin price has increased
Growing institutional demand for Bitcoin
On Monday, Digital Currency Group (DGC) announced that its valuation had doubled to $4.4 billion by the end of the fourth quarter and that it had managed to pay down more than $1 billion in debt. Experts expect outflows to further decline as the company’s Grayscale Bitcoin Trust (GBTC) is the primary issuer of spot ETFs. Meanwhile, several spot Bitcoin ETF issuers, excluding Grayscale’s GBTC, currently hold more than 216,000 Bitcoins, which is more than MicroStrategy’s 190,000 Bitcoins.
Growing pressure to buy whales
Bitcoin whales have been on a buying spree over the past few weeks, acquiring more than 140,000 Bitcoins worth more than $6.2 billion, according to on-chain data analysis provided by market intelligence firm Santiment. Notably, more than 70 percent of Bitcoin’s supply is held by long-term investors who have not moved their Bitcoin in over a year.
Rally economics before halving
Bitcoin’s fourth halving is expected to occur within 70 days, sparking historic speculation. Ideally, Bitcoin price can continue its bullish trend until the next major resistance level near $57,000, where a correction could begin.