As Bitcoin has grown by more than 22% over the past week, rising from $42,735 on February 7th to the current price observed in December 2021, a pullback from these levels would not be surprising.
The current market movement coincides with the rally before the halving. Such a trend has been observed in previous Bitcoin cycles. Historically, about eight weeks before the halving, the cryptocurrency rally begins. This may lead to prices surpassing the highs of the previous cycle.
Notably, the past week marked the revival of Bitcoin as a trillion-dollar asset largely due to the inflow of ETFs. According to the latest data, the decreasing selling pressure from GBTC and a constant inflow into other ETFs, averaging $300-400 million per day, have made a significant contribution.
It is also worth noting that at this point in time, BTC is already closer to its previous record high before the halving compared to previous cycles, likely due to enthusiasm associated with ETFs.
Additionally, it can be observed that when BTC sets highs in the middle of a bull market, there is a gradual inflow of capital into the altcoin market. Moreover, thanks to the strength of altcoins, the overall market capitalization of cryptocurrencies has reached $2 trillion.
However, due to the large number of crypto projects in this cycle, there has been a capital inflow into specific sectors, such as the Solana ecosystem and artificial intelligence-based projects, rather than a gradual distribution of capital across all altcoin markets.
But overall, spot BTC ETFs continue to stimulate demand for the leading cryptocurrency in 2024, and with the reduction in supply in the open market, the price will continue to rise.
