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- On February 27, bitcoin tested the level of $57,000. Over the day, the growth amounted to more than 10%.
- Cryptonicorn collected opinions on possible reasons for the jump in the price of the first cryptocurrency.
On February 27, 2024, the bitcoin rate tested the level of $57,000. Within a day, the price of the asset rose by more than 10%.
Previous events
On February 26, 2024, the total trading volume of spot bitcoin-ETFs reached record highs. At the same time, outflows from the largest fund – Grayscale Bitcoin Trust ETF (GBTC) – set a new low of $22.37 million, according to SoSo Value.
On the same day, MicroStrategy founder Michael Saylor announced that the firm purchased an additional 3,000 BTC at an average price of $51,813.
Experts’ assessments
In a comment to Incrypted, Pavel Savich, head of research for delta.theta and YieldFort projects, pointed out that on the afternoon of February 26, Ethereum “traded much better” than bitcoin. However, the situation changed dramatically after the opening of the U.S. trading session:
“In general, most of the growth came at the end of the American session. Accordingly, its main reason is trading activity in spot bitcoin-ETFs. American liquidity, which enters the market, pulls it up. There are days when demand is small, but yesterday it was one of the record highs.”
Trader and asset manager Vladimir Cohen noted that US institutional investors are still driving the market. He pointed out that trading volume in spot bitcoin-ETFs has quadrupled since Feb. 23.
“That said, BlackRock broke its own record and added $1.3 billion worth of bitcoins to its ETF, while outflows from Grayscale fell to a low of about $22.4 million, a very positive start to the week right after the end of the Chinese New Year,” Cohen said in a conversation with Incrypted.
Many other experts expressed a similar opinion. Cryptoinfluencer Anthony Pompliano noted the high demand for bitcoin on Wall Street. According to him, the commodity is “not enough” for everyone, which pushes the price up:
For those wondering why bitcoin is going vertical today, the answer is very simple:
Wall Street likes the orange coin, but there aren’t enough for everyone.
Price has to go up to accommodate everyone.
- Pomp 🌪 (@APompliano) February 27, 2024
Analyst Budhil Vyas said institutional demand is covering the sales pressure, ensuring rapid growth:
Yesterday’s official Spot #Bitcoin ETF Netflow was:
+$515,500,000
Institution absorbing every SELL Pressure 😳
This time will be Different for sure
- Budhil Vyas (@BudhilVyas) February 27, 2024
Bitcoin’s price is also affected by increased activity in the derivatives market, experts point out.
“The nearest expiration in options this week is monthly, quite large, also indicates that a large number of traders, short-term investors, buy call options and actively trade exactly in the upward direction, which affects the actions of the market maker big, which trades derivatives, and also helps the market move upwards,” said Pavel Savich.
Vladimir Cohen noted that he observes a partial inflow of liquidity into bitcoin and Ethereum derivatives from the stock market:
“Indeed, the indices are now at highs and their upside potential is not as great as bitcoin and Ethereum this year. The rise has also fueled the decline in the dollar index to 103.6 points. Investors have free cache after taking profits in the NASDAQ and S&P 500 and are ready for riskier trades.”
Dynamics in Deribit options also indicate further bitcoin upside potential, he said:
“As of March 29, a month before the halving, the volume is already $5.832 billion. Of that, there are $800 million in call (buy) options at $60,000 and $65,000. And more than $600 million of calls from $65,000 to $120,000.”
Additionally, experts highlighted developments in the bitcoin and Ethereum ecosystems that they believe will support the cryptocurrency markets in the near future.
In the case of Ethereum, these are structural factors, especially the Dencun update.
According to Savic, the expected hardfork along with the growth in the number of wallets, active users of the network, as well as the “airdrop season” and the arrival of new liquidity in the market will provide support for Ethereum.
For bitcoin, the upcoming halving and the constant high influx of liquidity play a weighty role.
“While other markets, particularly precious metals, are recording outflows, the spot bitcoin-ETF sector is experiencing inflows. And this is reflected in the price,” Savich said.
In addition, the expert pointed to the positive news background from the assessment of future prospects of cryptocurrencies from major U.S. market participants. According to him, MicroStrategy’s recent purchase of more than $150 million worth of bitcoins, even excluding ETFs, creates “quite a lot of additional demand.”
“Interest in the crypto market is growing, volatility in the next two months will be high,” Vladimir Cohen concluded.
