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Bitcoin: sudden surge to $65,000, ATH is just around the corner

Bitcoin: sudden surge to $65,000, ATH is just around the corner


2024-03-04 12:52:10

Author: Ekaterina Kiseleva

#Trading #Crypto industry news #Bitcoin

Bitcoin has surged to levels not seen since November 2021, capturing the attention of both investors and Bitcoin enthusiasts.

Sudden surge

The sudden spike on March 4, 2024, propelled Bitcoin above $65,500, just steps away from its all-time high (ATH) of $69,000. Despite a slight dip, BTC is currently trading around $65,022, with only a 6% gap remaining to reach the peak. Trading volume surged by 80%, reaching $40 billion, indicating a resilient and increasingly active market.

Cryptocurrency market sentiment, measured by the Fear and Greed Index, reached 82 points, signifying "extreme greed." This slight decrease from previous levels suggests that while the market is optimistic, investors may maintain cautious optimism. The index, ranging from 76 to 100 in such scenarios, often reflects FOMO (Fear of Missing Out) sentiments prevailing among traders and investors.


Bitcoin solves many problems in the monetary system

In a recent interview, Tom Lee, a well-known Bitcoin advocate and co-founder of Fundstrat Global Advisors, shared his insights into the future of the leading cryptocurrency. Lee's optimistic stance on Bitcoin since its early days has proven generally accurate.

A decade ago, when BTC was in its infancy and primarily used by a small group, Lee saw its potential despite the skepticism surrounding Bitcoin at the time. Even when it was worth just a few hundred dollars, he remained optimistic.

When asked what he sees in Bitcoin that others don't, Lee emphasized that Bitcoin addresses many issues in the monetary system:

"Bitcoin is a trustless blockchain, and yet there has never been a fraudulent record. This is a remarkable achievement, especially considering that 6% of all transactions from a traditional bank were suspicious over the same 14-year period."

Lee also noted that the value of the Bitcoin network is relatively easy to model based on the number of wallets actively using the network. This Metcalfe's Law-based model suggests that the network's utility will increase as the user base grows. According to Lee, this model still explains over 90% of Bitcoin's movements.

While the current number of people with Bitcoin wallets is in the millions, Lee believes this figure could reach hundreds of millions or even billions.

"So there's still upside potential from here," concluded the analyst.

More than 97% of wallet addresses are generating profits

According to data from the on-chain data platform IntoTheBlock, the recent surge in Bitcoin's value has led to a significant increase in the number of wallet addresses holding unrealized profits. According to the platform's data, the share of these wallet addresses has exceeded 97%, reaching a record level.

Recent data reveals that over 97% of Bitcoin wallet addresses are currently in a profitable state. Being "in profit" means that the average purchase price of these wallet addresses is below the current market price, which is approximately $65,000.

This metric corresponds to the highest level since November 2021, when Bitcoin reached its all-time high of around $69,000.

For a wallet address to be profitable, the market price of BTC must surpass the average purchase price of that wallet address. When this occurs, the wallet address is considered "profitable."

This indicates that the majority of Bitcoin investors acquired their coins at prices lower than the current market value. IntoTheBlock also noted that these data points suggest a reduction in selling pressure, as a significant percentage of wallet addresses are currently generating profits.

The platform also highlighted that newcomers entering the market and purchasing BTC are essentially buying from existing users who have already profited from their investments. This dynamic could contribute to strengthening the current positive market sentiment and continuing the ongoing trend of rising Bitcoin prices.

Rally gains momentum thanks to spot ETFs

Bitcoin has shown a noticeable upward trend this year, adding a 54% increase on top of the 154% growth recorded in 2023. Market observers attribute the price surge primarily to a strong inflow into spot exchange-traded funds (ETFs) approved in the United States in January.

The approval of spot ETFs on Wall Street has shifted the supply and demand dynamics in favor of bulls and potentially paved the way for new rallies that could propel Bitcoin to new record levels.

Alongside Bitcoin, the overall cryptocurrency market has also experienced positive dynamics. Many altcoins have gained value at rates up to 50% and even exceeding 100% since the beginning of the year.

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