Bitcoin: Here are the reasons for the comeback of the leading cryptocurrency to $71,000

Bitcoin reached a new price record a few days ago, soaring above $73,000. After disappointing investor expectations with a sharp correction to $65,000, the flagship cryptocurrency has once again hit the $71,000 mark. Here, in this article, are the reasons that can justify such a strong comeback.

The main reason for bitcoin’s unexpected surge

Those among investors who were not deterred by bitcoin’s recent downturn can rub their hands gleefully. Indeed, starting yesterday, the flagship crypto has been on a new upward trajectory, crossing the $70,000 threshold.

In fact, the king of cryptos is currently worth roughly $70,935, having gained 5.75% on its valuation from 24 hours ago. A momentum that created a shockwave in the crypto sphere and can be explained by the confluence of several factors.

Firstly, the influence of the futures market cannot be overlooked. Recent data has revealed an astonishing total of $184 million in crypto liquidations. Out of this total, $56.9 million concerns bitcoin in short positions and $16 million in long positions.

Thus, analysts are witnessing a strong increase in open interest in the bitcoin futures market. This suggests that a significant number of investors are leveraging, meaning they are borrowing funds to expose themselves to the crypto.

Bitcoin Price Surges Past $71,000: 4 Key Reasons Behind The Rallyhttps://t.co/1om4t81frv

— John Morgan (@johnmorganFL) March 26, 2024

Other factors

It appears that certain financial announcements have served as a catalyst for bitcoin’s sharp rise. Notably, the news from the London Stock Exchange about the introduction of exchange traded notes (ETNs) for bitcoin and ether. An event expected by May 28 that has bolstered institutional acceptance of the flagship crypto.

Another catalyzing element is the dynamic surrounding Bitcoin ETFs and the Coinbase premium. According to analysts, these have a significant impact on the rally. Indeed, the positive spread of the Coinbase premium reflects strong demand for spot Bitcoin ETFs. With Coinbase acting as a custodian for 90% of the Bitcoin ETF assets, this is yet another sign of institutional interest.

Moreover, from a technical perspective, bitcoin’s breakout from a descending parallel trend channel on the 4-hour chart seems to have changed the game. A successful test of the resistance zone confirmed the legitimacy of the breakout, prompting a rise of more than 7% in bitcoin’s price. This has boosted the confidence of traders and investors.

Of course, this surge has, as usual, captivated the crypto community. However, doubts remain about the sustainability of this upward trajectory in a context of concern regarding over-indebtedness and the stability of the crypto market. Bitcoin’s recent collapse after a record high requires investors to exercise caution.