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Bitcoin (BTC) continues to chart a new course as it surged past $67,000 in early Monday trading, closing in on its all-time high of $69,000 with only a 2.5% gap remaining. This remarkable performance is particularly noteworthy as Bitcoin has never reached a new ATH before its quadrennial halving. However, with the halving still about 48 days away, BTC has achieved impressive weekly gains of 8%, 14%, and 22% over the past month.
Bitcoin is Unprecedented Rally Before the Halving
Bitcoin’s climb to nearly $67,000 marks a significant event as it is poised to set a new all-time high before the anticipated halving in April. Historically, Bitcoin has never hit a new ATH before its quadrennial halving, but current market dynamics suggest this time could be different. Over the past month, Bitcoin has recorded weekly gains of 8%, 14%, and 22%, signalling strong bullish momentum.
Data from TradingView reveals that Bitcoin bulls began pushing the price upward early on Sunday, incrementally driving its value higher and overwhelming the bears. This surge is largely attributed to the relentless demand from spot BTC ETFs, which has significantly reduced the available supply on cryptocurrency exchanges.
Growing Popularity of Meme Tokens
Meme tokens continue to enjoy popularity among crypto enthusiasts, with the sector being one of the top performers in the market. Even presidential candidates have started to recognize the appeal of this sector, with Robert Kennedy Jr. recently endorsing Shiba Inu’s slogan, “It’s Not A Meme, It’s A Movement,” during an event at ETHDenver 2024.
Surging Demand for BTC ETFs
“The BTC Spot ETFs continue to exhibit strong momentum, with a cumulative net inflow of approximately $1.7 billion recorded last week, bringing the total net inflow since inception to about $7.4 billion,” said Matteo Greco, Research Analyst at Fineqia International. “Leading the race is the Blackrock Bitcoin ETF (IBIT), which surpassed $10 billion in assets under management (AUM) last week, setting a record as the fastest ETF in history to achieve this AUM milestone.”
Greco noted that trading volumes for the BTC Spot ETFs saw a significant surge during the week, totalling $22.3 billion, with an average daily trading volume of almost $4.5 billion. This marked a remarkable 265% increase from the average daily trading volume of $1.7 billion recorded since inception. The cumulative trading volume now exceeds $73.9 billion, with the daily average volume surpassing $2 billion, currently standing at $2.1 billion.
Trading volumes on centralized cryptocurrency exchanges have also increased, reaching a cumulative trading volume of $73.4 billion for the week. This represents an 80% increase from the previous week’s volume of $40.7 billion and marks the highest weekly trading volume recorded since May 2022. The data underscores the recent price appreciation accompanied by robust trading activity.
Broader Market Impact and Stablecoin Insights
Greco highlighted that the momentum shown by Bitcoin has extended to the broader market and helped push the total cryptocurrency market cap above $2.5 trillion. The metric is now approaching its all-time high of $3 trillion.
“Notably, the Total3 metric, which excludes Bitcoin and Ethereum (ETH) and represents the market cap of the top 125 capitalized digital assets, has surged to $660 billion, reflecting a 19.3% growth week-on-week and a 31.5% year-to-date increase,” he said. “This underscores the broad impact of BTC Spot ETFs on market momentum beyond BTC’s price action.”
Examining the total stablecoin supply also provides insights into heightened demand. During periods of low demand, the supply of stablecoins typically decreases as investors exchange them for fiat currencies like USD, GBP, or EUR, thereby reducing the overall circulating supply.
Conversely, during phases of increased liquidity injection into the market, the supply of stablecoins tends to expand. Presently, the total stablecoin supply stands at approximately $145 billion, reflecting a continuous uptrend from around $129 billion noted at the end of September 2023. This confirms sustained strong investor demand observed throughout Q4 2023 and into Q1 2024.
Conclusion
The continuous growth and demand for Bitcoin and other cryptocurrencies indicate a robust market movement leading up to the halving event. With the significant influx of investments and trading activities, the cryptocurrency market showcases its dynamic nature and potential for future gains.
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