At the time of writing, Bitcoin was traded about $ 1,000 below its last ATH of $ 52,547. While there is a lot of bullish perception around, the truth is that doubts about the sustainability of the price rally begin to rise when the price is in a previously unexplored region.
However, it should be noted that the latest increase in price comes after Tesla’s investment of 1.5 billion dollars. Tesla investment has made it easier for other institutions to invest in Bitcoin, as it normalizes risk and eliminates psychological barriers. In addition, the stocks of the largest companies that invest in Bitcoin outside of their balance sheets indicate a high correlation (0.98) with each other. This includes Tesla, Microstrategy, Square and others.
Additionally, the Grayscale Bitcoin investment product rose above 8 percent, so Bitcoin’s expanded price rally is due to several growth drivers – double digit gains in the highest altcoins, its sub-season that erupted a week ago, and the demand for institutional investment through Grayscale GBTC. and it drives the volatility and shortage narrative.
The key is that institutional interest has not yet reached its peak, but it started in September 2020 with a new ATH in Bitcoin price every week. As for the BTC / USD trade volume on spot exchanges, platforms like CEX.IO, which are considered one of the clearest indicators of the direction the price rally will go, saw a sharp increase in volumes after the price of Bitcoin exceeded $ 50,000.
In fact, the market predicts that the BTC / USD price increase will continue in the medium term, according to CEX.IO Executive Director Konstantin Anissimov.
Alongside the price action on spot exchanges, derivatives exchanges have seen an increase in open positions and trading volumes since the price reached $ 50,000. It is important to note that although their trade volumes were lower than the levels of previous ATHs, they were steadily increasing. Additionally, Bitcoin inflows to exchanges are almost half that of early February 2021.
The decline in the inflow of funds to the exchanges seems to indicate that there is no selling pressure on Bitcoin at the price level for now. In fact, later on February 17, the crypto price reached a new ATH of $ 52,547, and price discovery was apparently not interrupted. While there is doubt every time the price crosses a psychological hurdle, there is also an expectation for a correction. Still, the current volatility and trading volume in the exchanges point to ongoing price discovery and a journey towards a new ATH.