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Bitcoin Gets to $57,000 as the Cryptocurrency Market Makes Another Push to the Upside Within a Month-Long Rally

Bitcoin inches closer to the all-time high as the crypto market is feeling the bullish vibe

The surge in Bitcoin's price has left many speculators astounded, yet those who follow the market closely understand why Bitcoin is up once again. Currently, all bullish forecasts regarding its price are materializing, with the first cryptocurrency recording a notable 5% uptick in the past 24 hours alone. This rally has propelled Bitcoin to test the $57,000 mark, a level it hasn't touched since October 21, a significant milestone marking the peak of the last major rally before the onset of the second crypto winter.


BTC/USDT 1-Week Chart. Source: Tradingview.

For a clearer understanding of the current surge, we'll conduct a Bitcoin price analysis on the weekly chart using Fibonacci retracement, which helps identify key support and resistance areas. We'll focus on the major support level identified in prior weeks' what's Bitcoin price doing analysis. This level represents a critical zone of liquidity, currently fueling the rally. However, it could also turn into a point of attraction during a correction that may begin any day in such an overheated market.

The chart effectively demonstrates how the Bitcoin price interacted with the crucial support level, along with the 61.8% and 70% Fibonacci levels, which functioned as significant and minor rejection points, respectively. Consequently, there's a strong possibility that the price of Bitcoin will encounter resistance around the 79% level, which closely aligns with $60,000. This level holds immense psychological significance, as many who purchased Bitcoin at the peak of the previous bull market would likely seek to break even at this point.

Despite the bullish momentum currently in favor of buyers, evidenced by the rising green histogram on the MACD indicator without yet reaching the overbought zone, there is one major cause for concern regarding this significant rally: the low trading volume. This phenomenon can be a potential indicator of market manipulation, where a small group of influential traders with substantial resources artificially inflate the price to create a false perception of market strength. This group could potentially include the top asset management firms who have been actively advocating for the SEC's approval of a spot Bitcoin ETF.

Therefore, it's crucial to keep a close eye on trading volume spikes to pinpoint the moment when the correction begins, as this is when whales typically start locking in profits from meticulously orchestrated Bitcoin rallies. Their objective is to accumulate as much BTC as possible, ensuring they have significant holdings to influence price fluctuations and keep ETF buyers happy.

Why is Bitcoin price up today? 

Having studied the Bitcoin price chart, it's time to peek "under the hood" and explore the factors driving this buying frenzy. While the recent ETF approval undoubtedly serves as the primary catalyst for the ongoing buying frenzy, it's crucial to go beyond this surface explanation. 

Microstrategy is doubling down on Bitcoin buying 

Following the announcement by business intelligence firm MicroStrategy on February 26th, Bitcoin experienced a surge. The company revealed it had acquired an additional 3,000 BTC for $155 million, bringing their total holdings to 193,000 BTC, representing an average purchase price of $31,544. 

This news, coupled with data indicating 9 new spot Bitcoin ETFs have collectively accumulated 300,000 BTC since launch, suggests growing institutional interest in the cryptocurrency. While the recent ETF approval is undoubtedly a key driver, the combined effect of dwindling supply through institutional accumulation and sustained demand is expected to propel Bitcoin prices higher in the near future.

Bitcoin open interest hits the all-time high 

Since mid-October 2023, Bitcoin (BTC) derivatives have seen a significant rise in both open interest (OI) and overall volume in Bitcoin futures. Open interest, a crucial metric in derivative markets, represents the total number of outstanding futures contracts not yet settled. Essentially, it reflects the inflow of capital into the Bitcoin derivatives market.



Blue Line - BTC Open Interest. Columns - Volume. Source: CME Group.

As of February 27, 2024, open interest for BTC futures has reached an all-time high (ATH) of $24.44 billion. This surpasses the previous record of $23.06 billion, set on the eve of Bitcoin's $69,000 peak in November 2021. Notably, this figure also outstrips the OI observed on April 13, 2021, which stood at $24.27 billion, marking a significant milestone for the market.

Similar to other market indicators, bitcoin futures OI can provide valuable insights into trader sentiment. Increasing OI typically signifies a bullish trend, while decreasing OI suggests a bearish sentiment. This latest ATH in OI suggests a strong bullish sentiment in the Bitcoin market, potentially indicating further price gains in the near future.

Bitcoin market capitalization is poised to reach $1.5 trillion thanks to the heightened demand from institutional investors

CryptoStake anticipates a surge in the Bitcoin market cap, potentially reaching $1.5 trillion. This growth is attributed to increased availability of spot exchange-traded funds (ETFs) from BlackRock and others, as well as escalating trade volumes within the top 10 crypto assets.  Jurrien Timmer of Fidelity believes Bitcoin could soon capture 25% of the non-industrial gold market.

Paolo Ardoino, CEO of Tether, sees Bitcoin deeply integrating with traditional finance as hedge funds, pension funds, and corporations become more interested in the cryptocurrency.  He and CryptoStake predict growing appeal for fund managers to include Bitcoin in their portfolios, specifically after the approval of spot Bitcoin ETFs in the U.S. This could lead to fund managers allocating up to five percent of their portfolios to Bitcoin. Ardoino also believes that more companies will adopt the trend of holding Bitcoin on their balance sheets, legitimized by the availability of spot Bitcoin ETFs. Currently, only a few companies, like Tesla, Inc. and MicroStrategy Inc., have significant Bitcoin holdings.

Bottom line

Bitcoin is surging due to several factors. The approval of a spot Bitcoin ETF in the U.S. is a major driver, attracting institutional interest and possibly increasing investment allocations. Alongside this, growing trading volumes of major cryptocurrencies and projections like Bitcoin entering the gold market paint a positive future. CryptoStake foresees a rise in market cap, and there's talk of Bitcoin integrating further into traditional finance. With companies like Tesla and MicroStrategy holding significant Bitcoin reserves and the legitimacy from spot ETFs, broader corporate adoption could be on the horizon.