Bitcoin rises above $50,000, bullish trend becomes clearer

Macroeconomics and financial markets

On the US New York stock market on the 12th of last week, the Dow Jones Industrial Average closed 125.6 points (0.33%) higher than the previous day, while the Nasdaq index closed 48 points (0.3%) lower.

As Bitcoin prices soared, among U.S. stocks related to crypto assets (virtual currency), MicroStrategy, which holds a large amount of Bitcoin, rose 9.8% from the previous day, and mining-related Marathon Digital rose 12.4%.

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Virtual currency market conditions

In the crypto asset (virtual currency) market, Bitcoin (BTC) rose 3.7% from the previous day to 1 BTC = $50,000.

BTC/USD weekly

The price has surpassed the most recent high recorded after the Bitcoin ETF was approved. Among the major alts, Ethereum (ETH) rose 6.2% from the previous day, and Solana (SOL) rose 7.3%.

Crypto Rover expressed the view that a bullish trend reversal will become clear once 1 BTC = $48,500 and the price breaks through the 0.618 Fibonacci level. Fibonacci is the return high when subtracting the near-term bottom of $16,000 at the time of the FTX shock in October 2022 from the $69,000 recorded in November 2021.

Arthur Hayes, founder of BitMEX, had bought a put option with a strike price of $35,000 in anticipation of a correction in Bitcoin, but when it did not fall as expected and rebounded sharply, he closed his position and turned bullish. That's what it means.

Ki Young Ju (@ki_young_ju), CEO of data analysis company CryptoQuant, pointed out that 1 BTC could reach $112,000 by the end of this year.

#Bitcoin could reach $112K this year driven by ETF inflows, worst-case $55K.https://t.co/HrkV3TU8Ul pic.twitter.com/jBn6HWpt9b

— Ki Young Ju (@ki_young_ju) February 11, 2024

The basis for this is that the pace of inflows into Bitcoin spot ETFs reaches $9.5 billion every month. He pointed out that if the current pace continues, it could increase by $114 billion annually. Even after subtracting outflows from Grayscale's investment trust Bitcoin Trust (GBTC), a significant increase is expected.

Ki Young Ju also estimated future prices based on the MVRV ratio. According to past market trends, the 0.75 level would be the bottom, and the 3.9 level would be the ceiling. MVRV is calculated by dividing Bitcoin's market capitalization by its realized capital (Realized Cap), and is one of the indicators that indicates the top of a bull market and the bottom of a bear market.

Inflows into exchange-traded investment products (ETPs) exceeded $1.1 billion last week, according to asset management firm CoinShares' weekly report.

Inflows of US$1.1bn into digital asset ETPs, momentum of inflows into new issuers not slowinghttps://t.co/IERahbmYhO

— James Butterfill (@jbutterfill) February 12, 2024

Total assets under management (AuM) reached $59 billion, the highest level since early 2022.

On the other hand, the reaction of individual investors who have become skeptical due to the FTX bankruptcy etc. is generally slow, and Google trends showing organic search inflows for “Bitcoin” are still sluggish, indicating low interest among individual investors. Some say that this suggests a high level of sustainability.

Hovering around $50k and google search trends for “bitcoin” look like this lol pic.twitter.com/j0S4Cs1lgp

— Will (@WClementeIII) February 12, 2024

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