Bitcoin Price Skyrockets Above $71,000: Key Reasons Explained
2024年10月30日 - 1:30AM
NEWSBTC
The Bitcoin price has surged past the $71,000 mark today. Over the
past five days, Bitcoin’s price has rallied by more than 8.5%,
climbing from $65,600 to as high as $71,118 on October 29. In the
last 24 hours alone, the BTC price has increased by 3.8%. This
upward momentum can be attributed to four key factors: #1 Bitcoin
ETFs Attract Massive Inflows The surge in Bitcoin’s price is
closely linked to substantial inflows into Bitcoin Exchange-Traded
Funds (ETFs). Yesterday witnessed massive ETF flows totaling $479.4
million. BlackRock led the inflows with $315.2 million, followed by
Fidelity at $44.1 million, Ark with $59.8 million, and Bitwise at
$38.7 million. These significant investments coincided with
Bitcoin’s price movement from $68,000 to over $71,000. Leading
on-chain analyst James “Checkmate” Check highlighted a divergence
between Bitcoin ETF inflows and CME Open Interest. He noted “We
have a divergence between Bitcoin ETF Inflows and CME Open
Interest. ETF Inflows are ticking meaningfully higher, CME Open
Interest is up, but not as much GBTC outflows are also minimal.
We’re seeing true directional ETF inflows, and less so cash and
carry trades.” The divergence suggests that investors are favoring
direct exposure to Bitcoin through ETFs rather than engaging in
cash and carry trades involving futures contracts. The carry trade
strategy in the context of US spot Bitcoin ETFs and CME futures
involves buying the ETF (tracking the spot price of Bitcoin) and
simultaneously shorting Bitcoin futures on the CME. This approach
aims to capitalize on price differences when futures trade at a
premium to the spot price (contango). The notable shift toward ETFs
indicates a bullish sentiment among investors, anticipating further
price appreciation. #2 The “Trump Trade” Political developments are
also influencing Bitcoin’s recent rally. Singapore-based QCP
Capital commented on the impact of former President Donald Trump’s
interview on the Joe Rogan Experience podcast, which has gained
over 32 million views and driven his Polymarket odds above 66%.
Despite “crypto” being touted as the “Trump Trade,” Bitcoin’s
correlation with Trump’s potential election victory seems to fuel
the Bitcoin price rally. QCP Capital also noted that Bitcoin is up
only 8% this “Uptober,” compared to an average of 21% in previous
Octobers. They stated, “If spot holds at these levels, this October
would mark Bitcoin’s fourth-worst performance in the past decade.”
With total BTC perpetual futures open interest across exchanges
standing at $27 billion—approaching this year’s peak—a breakout
above $70,000 could trigger new all-time highs, especially with
more leveraged longs joining in. #3 Shorts Squeeze Amplifies Price
Surge Market data indicates a significant shorts squeeze
contributing to Bitcoin’s price spike. According to Coinglass, in
the past 24 hours, 65,622 traders were liquidated, with total
liquidations across the entire crypto market amounting to $228.51
million. Of this, $169.47 million were short liquidations.
Specifically for Bitcoin, $83.61 million in shorts were liquidated.
The largest single liquidation order occurred on Binance’s BTCUSDT
pair, valued at $18 million. The substantial liquidation of short
positions suggests that many traders were betting on a price
decline and were forced to close their positions as the market
moved against them. This mass unwinding of shorts can accelerate
upward price movements as traders buy back into the market to cover
their positions. #4 Whales Increase Buying Activity Large-scale
investors, often referred to as “whales,” are playing a pivotal
role in the current rally. CryptoQuant analyst Mignolet observed
that Bitcoin’s rally continues, led by activity on the Binance
exchange. He pointed out that Binance whales began significant
involvement in the market two weeks ago during Asian trading hours,
and recent declines in the Coinbase Premium Gap (CPG) alongside
price increases are “a clear sign of Binance whales’ intervention.
Mignolet emphasized that this should not be interpreted as a
decline in US demand, but an even stronger buying pressure from
Binance. Over the past two weeks, demand for US Bitcoin spot ETFs
has surged, with a net inflow of approximately 47,000 Bitcoin.
Since most ETF products use Coinbase, movements in CPG data are
closely tied to ETF demand. He concluded, “The current Bitcoin
price is being driven by Binance whales, with sustained inflows of
US capital.” At press time, BTC traded at $71,340. Featured image
created with DALL.E, chart from TradingView.com
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