Bitcoin reaches a new All Time High: analysis of the rally towards $70,000 before the halving

Recently, the value of Bitcoin has continued to reach new All Time Highs, reaching $70,000 to be exact. 

The price of Bitcoin is currently experiencing a significant surge, amplified by the innovative “ETF effect” and the positive market sentiment ahead of the upcoming halving. 

Let’s see below all the details. 

Effects and causes of the new All Time High of Bitcoin

As anticipated, the value of Bitcoin experienced a significant acceleration on Friday, temporarily surpassing the $69,000 barrier to reach new peaks at $70,000.

Despite calls for a retracement, the main cryptocurrency remains strong, especially considering the significant rally that started from lows below $40,000 in January.

However, a significant obstacle between $69,000 and $70,000 represents a question mark in the current context. 

It is not entirely clear why some investors are selling during this phase of strong growth, but it is plausible that much of the selling pressure is coming from older miners. 

After a fluctuating week, characterized by a significant increase above $69,000 at the beginning and a rapid descent below $60,000, supporters of the rise have returned strongly.

The ability of Bitcoin to reach new all-time highs of $70,000 recently suggests a potential ongoing support for the rally pre-halving.

The “FOMO” (fear of missing out) is destined to capture retail investors and other smaller participants at every new record reached by Bitcoin.

Furthermore, a strong support has consolidated in the range between $65,053 and $67,008, as indicated by the blockchain analysis by IntoTheBlock.

Bullish perspectives for Bitcoin: strong acquisitions and on-chain clues

Approximately 802,000 addresses have acquired 687,000 BTC at an average price of $65,960, confirming the bullish perspective of Bitcoin. 

The IOMAP reveals the lack of significant resistance zones, suggesting a possible strengthening of the rally above $70,000 in the coming days. 

On-chain flows from exchanges are increasing, highlighting a positive market sentiment. After a slight correction of 18,670 BTC on February 18, the aggregated volume of outgoing exchanges rose to 34,410 BTC.

As we know, investors prefer to keep their BTC outside of exchanges when they do not intend to sell them in the short term. 

The increase in outflows from exchanges could therefore indicate a reduction in selling pressure, further supporting the price of Bitcoin for another upward phase. 

Overall, this factor helps shape the long-term prospects of Bitcoin in a positive way.

The success of Bitcoin ETFs among the causes of the rally

After almost sixty days since the approval of spot Bitcoin ETFs by the Securities and Exchange Commission (SEC) in the United States, exchange-traded funds led by BlackRock’s IBIT have exceeded all expectations. 

Indeed, ETFs have achieved milestones that gold equivalents have taken years to conquer.

With a total accumulated net inflow of 9.37 billion dollars, according to SoSoValue, the demand for BTC is growing at a surprising rate. 

Positive sentiment is on the rise, with an increasing number of participants, both institutional and retail, converging on Bitcoin, the cryptocurrency, and ETFs.

Eric Balchunas, ETF analyst at Bloomberg, stated in a recent interview that the growth of ETFs is due to asset managers willing to buy, increasing interest in retail, and the momentum generated by the “ETF effect.”

The “ETF effect” refers to the situation in which people anticipate greater inflows while placing orders to take advantage of potential price increases. 

According to Balchunas, the IBIT ETF is standing out from the others and seems destined to become the most successful ETF in the financial landscape.