Bitcoin Above $60K: What's Driving this Surge?
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Bitcoin Above $60K: What's Driving this Surge?

Created 2mo ago, last updated 2mo ago

With prices approaching $60,000 for the first time in over two years, we explore the key factors around Bitcoin's latest surge.

Bitcoin Above $60K: What's Driving this Surge?

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Bitcoin has done it again - it is now above the $60,000 level for the first time since November 2021.

This latest price surge comes right after Bitcoin topped $50k just two weeks ago.

At the time of writing, its market cap has swelled to a staggering $1.15+ trillion. Not bad for an "untested technology" that many critics had left for dead after the recent bear market.

The question is - what's driving this latest surge? Let's dive in and explore the key factors lifting Bitcoin's price to heights.

Institutional FOMO Kicking In

Bitcoin's current rally has been majorly driven by the growing appetite among institutional investors.

MicroStrategy recently bought 3,000 more Bitcoins, increasing its total holdings to around 193,000 BTC. Its average buying price stands at $51,813 per Bitcoin.

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Meanwhile, new US spot Bitcoin ETFs have attracted over $17 billion in inflows from institutional investors since launching in January. Some believe this demand will strengthen further.

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According to LMAX Group's Joel Kruger, spot Bitcoin ETFs prove that "mainstream adoption is underway." With limited supplies versus strengthening institutional demand, Kruger sees Bitcoin prices rising past previous records.

In essence, growing institutional interest coupled with capped Bitcoin supplies lays the foundation for Bitcoin to appreciate substantially.

Halving Cycle Playing Out

The Bitcoin community is also buzzing about the upcoming "halving" event expected in April.

Past halvings have preceded Bitcoin entering prolonged bull runs. Prices typically begin rallying a year out as speculators try to predictively front-run the drop in new BTC supply.

As a popular crypto trader and analyst Rekt Capital points out, BTC seems to now be entering the "pre-halving rally" phase of its market cycle.

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Many believe this trend has the potential to pick up steam as we get closer to the halving event. And the psychology of anticipated future scarcity has already started heating up the bullish sentiments. However, it's important to keep a level head. As we've seen before, what goes up can come down in crypto.

As of today, the CMC Crypto Fear and Greed Index sits at 80. This signals extreme levels of greed, indicating that investors may be getting overzealous and less rational amidst bullish price momentum. Typically any reading over 70 is considered an "extreme greed" environment. With euphoria potentially outpacing reason, the crypto markets could be prone to volatile corrections if momentum stalls.

Where Does BTC Go From Here?

With Bitcoin now reaching the $60K territory, analysts are keeping a close watch on whether BTC can eclipse its previous all-time high above $69K in the coming weeks.

Of course, while the technical and on-chain signals look promising for Bitcoin to continue this vertical ascent, investors should remember that extremely volatile swings in both directions are quite common in crypto markets.

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