Bitcoin Price Soars 11%, Here Are The Reasons
The Bitcoin bulls are back for good. The BTC price has risen by about 11% in the last 24 hours. At one point, Bitcoin reached a price of $24,789 and took a breather just before the August 15, 2022 high at $25,195.
The rally is likely to have caught some bears off guard. After Tuesday’s headline CPI came in at 6.4% higher than expected (6.2%), but still lower than the previous month on a year-over-year basis (6,5%), market disappointment was initially high; nevertheless, BTC saw an initial push to the upside as early as Tuesday.
Then, on Wednesday, US retail sales for January 2023 were released. Those rose 3.0% in January, an impressive rebound from December’s -1.1% and well above the consensus estimate of 2.0%.
Subsequently, Bitcoin experienced a surprising decoupling from the rest of the financial market. While Bitcoin began its massive rally, the S&P 500 remained largely stuck at its level. The dollar index (DXY) even rose in parallel with Bitcoin – an event that has been extremely rare in recent months due to the inverse correlation.
Bitcoin is also defying financial market fears that the recent CPI and U.S. retail sales will give the data-dependent Federal Reserve more arguments for higher and longer rate hikes. In addition, there are fears about a recession.
So What Has Been Driving Bitcoin Prices Higher?
Crypto analytics service Santiment has cited a surge in Bitcoin holdings by owners with 100 to 1,000 BTC. However, while this cohort of investors has accumulated Bitcoin, the sharks (1,000 to 10,000 BTC) and whales (more than 10,000 BTC) have not provided any sign of major buying behavior.
Data provider Lookonchain reports that they have found that several funds and institutions have put nearly $1.6 billion into the crypto market since February 10. For this, Lookonchain analyzed the data on USDC deposits and withdrawals on Circle from February 10 until today.
As a result, it turns out that several funds and institutions have withdrawn about $1.6 billion USDC from Circle and only deposited $0.2 billion USDC. One mysterious fund has withdrawn $155 and $397 million USDC from Circle and transferred them to exchanges since February 10.
Another unknown fund has reportedly withdrawn $953.6 million USDC from Circle and transferred it to exchanges. A fund linked to FalconX also withdrew $143 million USDC from Circle.
Other Factors That Might Play A Role
The crypto market and Bitcoin may also have been positively impacted by the news that Binance is working with U.S. regulators to settle for past misconduct with a fine reportedly ranging from $1 billion to $2 billion.
A rather very vague rumor is that Russian investors may have stormed into Bitcoin and crypto. The rationale behind this is that prior to the announced new sanctions against the two largest Russian banks that were previously allowed to use SWIFT and play the largest role in P2P on Binance, namely Tinkoff and Rosbank – have led Russian investors to rush into of what was almost their last chance to buy Bitcoin.
Meanwhile, an analysis by CryptoQuant shows that yesterday’s price action resulted from aggression in the futures market. While traders opened short positions, open interest increased and the price moved against the short positions. This resulted in an impulse candle to the upside.
According to Coinglass data, total short liquidations for Bitcoin were $155.3 million yesterday.
At press time, the Bitcoin price stood at $24.612, facing the next major resistance at $25.195.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.