Key Points
- Bitcoin’s price soared above $60k due to increased demand from large-scale investors.
- Despite a historically weak period for cryptocurrencies, Bitcoin’s fear and greed index suggests reduced fear of further sell-offs.
Bitcoin’s price has experienced a surge of over 4% within the last 24 hours, reaching a daily high of approximately $61,361 on August 20. This significant rebound from the key support level of around $58k has eased the overall market’s fear of further crypto capitulation. It’s worth noting that historically, August and September are not typically strong months for the crypto industry, especially following Bitcoin halvings.
The fear and greed index for Bitcoin increased from 28 percent to around 30 percent, indicating a decrease in the fear of further sell-offs in the wake of the ongoing crypto rebound.
Driving Forces Behind Bitcoin’s Price Surge
As a globally traded commodity, Bitcoin has benefited significantly from poor monetary policies worldwide, which often lead to high inflation. Moreover, Bitcoin is a deflationary commodity asset due to its halving events that occur every four years.
However, Bitcoin’s price has shown a high correlation with major global stock indexes, as demonstrated by the August 5 crash that impacted nearly all financial sectors. Earlier today, Japan’s Nikkei 225 led other major stock indexes in a bullish recovery, which was also influenced by the ongoing bullish rally in Gold.
Experts believe that the crypto industry would have followed the stock and gold-led bullish pattern.
The crypto rally today was also heavily influenced by a significant increase in demand from institutional investors. According to on-chain data analysis provided by Santiment, Bitcoin whales holding between 100 and 1k coins added 94.7k BTCs in the past six weeks, currently owning over 3.9 million units.
For instance, Metaplanet Inc. (Tokyo: 3350) announced earlier today that it had completed the acquisition of 57.273 Bitcoins, worth approximately $3.4 million, thus currently holding 360.368 BTC units. Another whale was spotted making a purchase of 347 Bitcoins from Binance, worth over $16 million, and currently 1,953 BTC units.
Meanwhile, the US spot Bitcoin ETFs registered a net cash inflow of $125 million led by Fidelity’s FBTC.
Midterm BTC Price Forecast
Despite today’s rebound above $60k, Bitcoin’s price is not yet secure. From a technical standpoint, the flagship coin must consistently close above the 50 and 200 Moving Averages (MAs) following their recent death-cross, to invalidate further correction ahead.
According to reputable crypto analyst Benjamin Cowen, Bitcoin dominance will continue to rise against the altcoin industry in the near term and possibly reach 60 percent. In this regard, Bitcoin’s price could continue to lead the altcoin industry in a bullish outlook, and potentially reach its all-time high in the near term.
