If you’re a bitcoin (BTCUSD) investor, Tuesday was a wild ride. After briefly surpassing $69,000 to an all-time high, bitcoin fell fast on likely profit taking to a shade above $60,000 just a few hours later before clawing back some of those gains.
While bitcoin is climbing again today, no one can predict which way the price will ultimately head. Here are some cues that market watchers are trying to decode to get a better picture of the cryptocurrency markets.
Inflows and trading activity in the spot bitcoin ETFs have been hectic over the past few days, especially for Blackrock’s iShares Bitcoin Trust (IBIT), which already accumulated $10.6 billion worth of bitcoin as of the end of the trading day Tuesday since it began trading in January.
In terms of direct effects on supply and demand, spot bitcoin ETF inflows, or the demand, were more than 10 times the supply or the amount of new bitcoin generated by miners on Monday, according to Bitwise Research Analyst Gayatri Choudhury.
Add to that, the halving event, where the amount of new bitcoin created roughly every 10 minutes is cut in half, is expected to take place on April 20. Remember, bitcoin supply is capped at 21 million, and with fewer new ones getting created at a slower pace, the demand and supply imbalance is what most people are betting on to make bitcoin prices pop.
Of course, not all crypto market observers see nothing but blue skies ahead for bitcoin.
«Things always look bullish at the peak. I was originally calling for this move higher when we were down in the low $30k, but I expected this to top out in the mid-to-high $50k region. This extension feels like a blow off top to me,” said John Glover, Chief Investment Officer at digital assets financial
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