Editor’s note: This story has been updated with fresh market information during the New York trading session.
Bitcoin continued its rally on Tuesday, briefly hitting a high of $72,597 in the afternoon before settling at $72,590, driven by record-breaking ETF inflows and heightened market activity in derivatives.
What Happened: This marks a 5.5% gain over the past 24 hours. Bitcoin last crossed the $72,000 mark in March this year and has since been rangebound.
This upward movement inches Bitcoin closer to the highly anticipated $73,737 level, its all time high, according to CoinGecko data.
Ethereum ETH/USD mirrored Bitcoin’s gains, currently trading at $2,645 after reaching a peak of $2,650, also up 5.5% over the same period.
This price surge comes as Bitcoin spot ETFs experienced an influx of $479 million on Oct. 28, led by BlackRock’s ETF IBIT with a $315.1 million addition, according to data from SoSo Value.
The Fidelity Wise Origin Bitcoin Fund FBTC saw inflows worth 44.1 million and ARK 21Shares Bitcoin ETF ARKB witnessed inflows of $59.7 million.
Ethereum spot ETFs had a total net outflow of $1.1376 million yesterday, data shows.
Bitcoin made a high of $71,540, according to CoinGecko data, and is currently trading at $71,460.
Also Read: ‘Asia’s MicroStrategy’ Metaplanet Buys Another $10.4M In Bitcoin, Exceeds 1,000 BTC Holdings
Why It Matters: Experts see these inflows, alongside other factors such as anticipated interest rate cuts, as positioning Bitcoin for further gains.
Speaking with Benzinga, Ryan Lee, Chief Analyst at Bitget Research, pointed to several influences shaping Bitcoin’s current performance, emphasizing the role of liquidity driven by ETF inflows and the potential for a Federal Reserve rate cut at its next meeting.
“A rate cut would improve overall macroeconomic liquidity, likely boosting crypto assets like Bitcoin,” Lee noted.
He added that Bitcoin ETFs have maintained net inflows for 11 of the past 12 trading days, indicating sustained demand from traditional Wall Street capital—a sign of rising confidence in digital assets among institutional investors.
In addition to ETF inflows, derivatives activity reflects significant trader engagement, signaling possible volatility.
According to Blockonomi data, Bitcoin’s open interest in derivatives recently reached $37.6 billion, close to its all-time high.
Darren Franceschini, co-founder of Fideum Group, told Benzinga that this heightened open interest correlates with potential price movement, as traders position themselves ahead of anticipated market shifts.
However, he cautioned that market dynamics could shift quickly, especially with the U.S. presidential election adding uncertainty around potential policy changes impacting crypto.
The increase in BTC price and activity also coincides with broader liquidation trends, with $222.8 million in liquidations recorded in the past 24 hours, according to CoinGlass data.
Short positions accounted for $164.6 million, indicating strong buying pressure that forced bearish traders out of the market.
These liquidations, alongside bullish ETF inflows, reinforce Bitcoin’s current upward momentum, though some indicators suggest caution.
In a note sent to Benzinga, Lead Analyst at CEX.IO, Illia Otychenko, highlighted technical signals showing that Bitcoin may be approaching a consolidation phase, with momentum indicators nearing overbought levels.
“Bitcoin’s correlation with traditional markets remains high, particularly with tech giants reporting earnings this week,” Otychenko noted, adding that while the RSI and MACD are favorable, they hint at possible consolidation before further advances.
Eneko Knörr, cofounder of Stabolut told Benzinga that as November draws near, it looks like the stars are aligning for an imminent major Bitcoin breakout.
He sees Bitcoin “out the other side” of the halving, which took place in April. Historically, bull markets have started 150-170 days after the halving. This timing coincides with Bitcoin’s supply on exchanges plummeting to record lows of less than 2 million BTC available. That scarcity creates all the potential for a “short squeeze,” he said.
Bitcoin, on a technical perspective, has just consolidated above the $67,000 level which he believes to be an excellent support or launchpad point for any upcoming breakout. With these variables all colliding, Bitcoin is forming a solid base for a potential breakout, Knörr said.
As more traditional finance companies incorporate Bitcoin into their offerings, the evolving role of crypto assets in institutional portfolios will be explored further at Benzinga’s Future of Digital Assets event on Nov. 19.
Read Next:
Image created using artificial intelligence with Midjourney.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.