Bitcoin is on an upwards trajectory approaching $97,000, with key factors indicating it may reach a new all-time high this year. A decline in exchange supply, surging retail and institutional demand, combined with strong technical indicators, all suggest a bullish outlook for Bitcoin’s future price.
Bitcoin’s price has shown a strong upward movement this week, crossing the significant resistance level at $97,000 – marking its highest value since February. As of Saturday, Bitcoin (BTC) was trading around $96,500, signalling a 30% rise since hitting its lows in April. There are three key factors that could propel its price to a new all-time high this year.
Firstly, the dwindling supply of Bitcoin on exchanges is noteworthy. Currently sitting at just 1.42 million, this represents the lowest level in over six years. To put this into perspective, supply peaked at 3.21 million coins back in 2018. Meanwhile, external Bitcoin supply has rocketed to 18.43 million coins, indicating that investors are holding onto their assets. This could lead to a supply squeeze amid increasing demand, reinforcing the bullish outlook.
Notably, major Bitcoin holders, including Michael Saylor’s Strategy, which owns more than 2% of the total Bitcoin supply, show no signs of selling. Top companies such as Coinbase, Tesla, and Galaxy Digital, among others, also maintain their positions without indications of a sell-off.
Secondly, both retail and institutional demand for Bitcoin is on the rise. This growth is evident through Bitcoin exchange-traded fund (ETF) inflows. According to SoSoValue, since their launch in January last year, Bitcoin ETFs have experienced only four months of outflows. They have cumulatively amassed over $40 billion in assets. Blackrock’s IBIT leads with $60 billion, followed by Fidelity’s FBTC and Ark Invest’s ARKB with $20 billion and $19 billion respectively.
This increase in ETF inflows points toward growing institutional interest within the U.S., but analysts suggest future demand may also stem from countries wishing to diversify their holdings away from the U.S. dollar. With these supply and demand factors in mind, analysts seem exceptionally optimistic. For example, Standard Chartered predicts Bitcoin could soar to $200,000, while Ark Invest’s projections suggest a staggering rise to $2.4 million by 2030.
Lastly, technical analysis of Bitcoin’s price indicates a promising long-term outlook. The cryptocurrency has consistently hovered above an ascending trendline established from its lowest swings since August 5 last year. Bitcoin has now surpassed the crucial resistance level of $88,690, alongside breaking above the 50-day and 100-day Exponential Moving Averages.
As a result, there are strong indications that Bitcoin is gaining momentum, potentially allowing it to breach the $100,000 mark before reaching its previous all-time high.
