Bitcoin has made an astonishing return from the rather volatile action of the last days, reclaiming the $67,000 mark and showing some resilience after investor uncertainty has been ruling the market.
After a period of turbulence which saw the Bitcoin price dip below $62,000, the cryptocurrency has surged back with intensity. BTC briefly reached $68,120.08 at the start of Thursday before settling at $66,828.32 later on in the day to represent a 6% climb over the past 24 hours, according to CoinGecko data.
Although Bitcoin has yet to regain its price from a week ago when it surged past $73,000 to set an all-time high, the recent rebound is an indication of underlying strength in the market.
The cryptocurrency price drop earlier in the week also partly traced to unusual activity from a trader on crypto exchange BitMex. But the crypto operator explained that the incident did not affect its derivatives markets and showed investors that the platform remains stable.
This, however, has failed to trickle down to the spot Bitcoin ETF flows despite the upward momentum in price. Investors for the third consecutive day pulled more money out of Bitcoin funds than they put in, redeeming $261 million worth of Bitcoin ETF shares yesterday alone.
This is particularly evident in the massive outflow seen at Grayscale Bitcoin Trust, GBTC, alone, which posted investors redeeming $387 million worth of shares yesterday. That puts the net outflows for GBTC in the past week at $1.5 billion, a sure sign that investors have started turning their backs.
Meanwhile, BlackRock's iShares Bitcoin Trust, IBIT, has continued to haul in deposits to such a degree that it could soon dethrone GBTC as the leading spot Bitcoin ETF.
Analysts are keeping a close eye on the price trajectory of Bitcoin after it fell below the $62,000 level, citing several variables contributing to this pullback, including profit-taking and speculation of the upcoming halving event.
Analysts, therefore, remain very optimistic of Bitcoin's long-term outlook, judging by historical precedence. In any case, this is not new: such pre-halving price corrections have taken place many times earlier. During previous cycles, large price movements for Bitcoin predated the ongoing bull market.
For instance, ahead of the 2020 halving, Bitcoin prices fell about 50%, a trend catalyzed by events such as the COVID-19 pandemic. Afterwards, the cryptocurrency consolidated at around $10,000 and then went into a bull run in 2021.
For example, in 2016, pre-halving, Bitcoin initially plunged about 33% and then rallied during the second half of the year to make new highs in the 2017 bull market.
While the current halving cycle entails a unique set of challenges and uncertainties highlighted above, including the emergence of spot Bitcoin ETFs and, crucially, institutional backing, according to analysts, the fundamentals of Bitcoin remain strong and would expect a long-term resurgence in prices.
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