Bitcoin price has surged almost 3% in the past 24 hours to trade above $110,000 after dropping to $103,300 last Friday. The bounce is part of an overall recovery in the crypto market that has seen total market capitalization rise 3.9% to around $3.77 trillion. The bounce comes on the heels of large ETF outflows worth $1.23 billion.
Bitcoin Price Recovery Explained
The recent price rally of Bitcoin is a direct effect of its recovery from the 200-day moving average, a critical technical level historically associated with changes in market sentiment. As BTC rallied, it brought on board buyers who had been waiting on the sidelines during the recent correction. The rally is seen by experts as a reflection of a new risk appetite among investors, something that was due after weeks of hesitation.
Effect of ETF Outflows
Despite having a good week, U.S. spot Bitcoin ETFs experienced massive outflows last week. BlackRock’s iShares Bitcoin Trust lost $268.6 million, and Fidelity’s Bitcoin fund lost $67.2 million. The outflows totaled $1.23 billion, the highest outflow in a week since February.
But such withdrawals have not lessened demand for Bitcoin. More than 45,000 BTC have been taken off exchanges since early October, which represents a tightening supply that might be able to underpin subsequent price rises.
Market Sentiment and Future Trends
The cryptocurrency fear and greed index is at 30, and this speaks to fear from traders. This decline to the extreme fear side tends to be a buy signal. Scott Melker, a popular market commentator, feels that this type of market momentum does not necessarily spell a bear trend, but instead is an opportunity for savvy investors to take advantage.
Bitcoin’s revival is underpinned by other favorable signals such as historic high in the network’s hash rate and recent mining difficulty decrease. These data indicate that Bitcoin’s underlying structure is strong, even in cases of market volatility.
The 3% BTC price surge is a sign of possible stability in the crypto market, even amidst ETF outflows. With shifting investor sentiment and restricting supply, the market can anticipate sustained growth.
