The price of Bitcoin ( $BTC ) dropped to approximately 72500 on Thursday morning reversing the upward momentum after touching 74000 almost without leaving analysts unsure whether the top cryptocurrency can possibly keep climbing amid the U.S.-Iran tensions.
I believes there is a reasonable opportunity of a second rally as long as the price of Bitcoin stays above the 70,000 mark. However cautioned that the price of BTC remains lower than the short-term holder realized price (STHRP) which is uncommon on the uptrends.
Bitcoin went off at approximately 72, 500 on Thursday morning, registering a 1.4 percent increase in the past 24 hours. BTC is nearly 40% lower than it was in October which has now reached a high of over 126,000. Retail sentiment shifted to extremely bullish levels, as compared to bullish levels, in the last day in the case of Bitcoin.
What is behind Technical Rally of Bitcoin?
XWIN Research Japan claimed that the recovery in the price of Bitcoin after the U.S.-Iran war shock was caused by the ETF inflows and short-covering. In early March, these funds received several hundreds of millions of dollars that directly contributed to the demand in the spot, the firm said in a note on CryptoQuant. On March 4 alone, over $200 million inflows were witnessed, and this shows renewed institutional involvement.
XWIN also reported that open interest increased very high and funding rates became negative which is serving as a short squeeze. The quote went on to say that as prices were rising short liquidations created a series of short covering that boosted the rally.
According to the data by SoSoValue, on Wednesday, 225.15 million went into spot Bitcoin ETFs. Weekly total inflows are expected to leave the week with net gains, having been interrupted by a series of consecutive outflows last week. The observers believe that the uncertainty of geopolitics is one of the major determinants of the price of Bitcoin because the U.S. and Iran are still engaged in tensions.