Bitcoin Surges Past $60,000: What's Next After the Correction? (2024)

On Wednesday, February 28, 2024, Bitcoin soared above $60,000 for the first time in over three years. The last time BTC reached such heights was in November 2021. From February 26 to 28, the leading cryptocurrency surged by 20%, reaching close to $64,000. But what will happen after the correction?

Influx of Funds into ETFs

Spot Bitcoin exchange-traded funds (ETFs) were initially highly anticipated, and their expected approval drove up the price of the leading cryptocurrency. Then came the approval by U.S. officials and the launch. And essentially, a correction followed for a month. But now, a new surge of activity: almost every day, new streams of cash flow into ETFs.

During the week starting February 26, the daily cash inflow into spot Bitcoin ETFs exceeded $500 million. According to Bitmex Research, on Monday, the figure stood at $520 million, and on Tuesday, it exceeded that amount, reaching $577 million.

The most successful ETF is the BlackRock exchange-traded fund called iShares Bitcoin ETF (IBIT). On February 27, the fund saw a record $520 million influx of funds. The intraday trading volume of IBIT reached $1.3 billion, comparable to the market capitalization of the largest U.S. companies.

One might wonder: how is it possible that the total influx into spot ETFs is $576 million, while one iShares Bitcoin ETF received $520 million? Yes! IBIT indeed captures the largest share of funds among all ETFs. Additionally, it is worth mentioning that investors continue to withdraw from the competing fund launched by Grayscale. On February 27 alone, nearly $126 million was withdrawn from there.

In essence, the bustling ETF activity spurred investors to buy BTC.

Short Liquidations

An important reason for Bitcoin’s rise could be the increased number of liquidations. If on February 25 the total liquidation amount was $13.78 million, then starting from January 26, the figure consistently exceeded $100 million (it hasn’t crossed that threshold on February 28 yet, but the day is not over).

The ratio of long liquidations to short ones is interesting. Short liquidation volume predominates. On February 26, the volume of short liquidation positions exceeded long ones by over eight times ($97.63 million versus $11.93 million). On February 27, it was twice as high ($95.02 million versus $45.48 million). And on February 28, it was over seven times higher for an incomplete day ($74.9 million versus $10.23 million). This information is provided by the Coinglass portal.

Extreme Greed

The Fear and Greed Index has reached a level of 82. This indicates extreme greed among Bitcoin investors. The last time the index rose so high was on October 20, 2021. It reached even higher levels earlier, in February 2021.

Well, greed is greed, but investors are more interested in what will happen next and when Bitcoin will surpass its all-time high.

All-Time High

In some countries, BTC is already trading against the local currency at record levels (not in terms of the dollar value, but in absolute terms of local currencies). If last week it was predominantly African countries, now the trend has spread to Asia. Bitcoin has reached its all-time high in Chinese yuan and South Korean won.

It seems we just have to wait for the dollar. The question is, when?

Technical Analysis

The $69,000 all-time high (Bitstamp exchange data) remains the only visible target and resistance level for BTC. All others have already been surpassed. If we strictly consider the dynamics of the last three days (from February 26 to 28, 2024), Bitcoin could have surpassed its all-time high this week.

A bold opinion was expressed by Adam Back, the CEO of blockchain technology development company Blockstream. He expects $100,000 within the next 51 days before the halving.

If we trust technical analysis, this doesn’t seem improbable. All major indicators show bullish momentum. The price is above the 50-week (marked in blue) and 200-week (marked in orange) moving averages. This indicates a long-term bullish trend. If a retracement does occur, the $48,000 level should act as support.

If we consider past trends, Bitcoin is characterized by short periods of rapid price increases. Over the years, periods when Bitcoin surpassed all-time high price levels have occurred at a similarly rapid pace. This partly explains the high volatility of the leading digital asset. From a fundamental perspective, optimism among holders is also fueled by the upcoming halving.

Conclusion

The main catalysts for Bitcoin’s rise above $60,000 were the influx of large funds into spot ETFs and significantly increased short liquidations. In many countries, BTC has set historical highs against local currencies. Now, investors are waiting for a significant event to occur with the U.S. dollar.

This material and the information in it are not individual or any other investment recommendation. The editorial opinion may not coincide with the opinions of the author, analytical portals, and experts.

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