3 reasons why Bitcoin price is up today

0


Bitcoin (BTC) price rose back above $70,000 for the first time in a week, recovering from the streak of negative flows into spot BTC exchange-traded funds (ETF) last week.

Data from Cointelegraph Markets Pro and TradingView shows the BTC price climbed from an opening of $67,212 to an intra-day high of $70,306 on March 25. At the time of publication, BTC was trading at $70,268, up 7.5% over the last 24 hours.

BTC/USD daily chart. Source: TradingView

Bitcon’s recovery follows a period of price downturn that has seen the cryptocurrency fall as low as $60,771, corroborated by negative ETF inflows. Could the surge in multiple BTC price metrics be a sign of things to come?

Weekly outflows into spot Bitcoin ETFs totaled $904 million

Last week “marked the end of a 7-week cycle” of inflows into crypto investment products as investors withdrew more than $942 million, according to a March 25 report by CoinShares.

The report noted that last week marked the “first outflow following a record 7-week run of inflows totaling US$12.3bn.”

Source: CoinShares

The crypto asset management firm attributed the large outflows to the recent drawdown in crypto prices, which “wiped US$10bn off total assets under management (AuM) but remain above prior cycle highs at US$88bn.”

CoinShares analyst James Butterfill said,

“We believe the recent price correction led to hesitancy from investors, leading to much lower inflows into new ETF issuers in the US, which saw US$1.1bn inflows, partially offsetting incumbent Grayscale’s significant US$2bn outflows last week.”

The poor sentiment was mostly focused on Bitcoin, which accounted for “96% of the flows” totaling $904 million, ”while short-bitcoin also saw minor outflows totaling US$3.7m.”

Weekly flows by asset. Source: CoinShares

Bloomberg analyst James Seyffart said that the large outflows witnessed by the spot Bitcoin ETFs last week were probably driven by bankrupt lender Genesis selling GBTC shares.

Source: James Seyffart

Spike in Bitcoin Age Consumed metric

Bitcoin has recently experienced a notable surge in its Age Consumed metric over the past few days. According to data from market intelligence firm Santiment, the number of dormant BTC addresses moving BTC surged to 162.89 million on March 23, the highest in over two years.

Bitcoin: Age consumed. Source: Santiment

Age Consumed is a metric that tracks the movement of previously idle BTC coins. The metric shows the number of BTC changing addresses daily multiplied by the number of days since they moved. Spikes signal a potential increase in price volatility.

This spike in Age Consumed suggests that previously dormant addresses holding Bitcoin are now re-entering circulation, indicating a revival in network activity. This was evidenced by a surge in transaction volume, as shown in the in chart below.

Bitcoin transaction volume. Source: Santiment

As Bitcoin’s Age Consumed metric grows, transaction volume increases, a precursor to potential price jumps in the BTC price.

Related: BTC price battles for key $69K as Bitcoin nears short liquidation zone

Is an altcoin season coming?

The CoinShares report noted that altcoins “fared well” last week, “seeing a net inflows of US$16m.” Most notable were Polkadot (DOT) with $5 million inflows, Avalanche (AVAX) with $2.9 million and Litecoin (LTC) with $2 million.

As such, a number of large-cap altcoins have outperformed Bitcoin over the last week. They were led by BNB Chains’ BNB, Dogecoin (DOGE), and Toncoin (TON, which have produced 7%, 20% and 46% gains in the last seven days, according to data from CoinMarketCap.

Although Bitcoin has only risen 4.5% over the same period, it has outperformed most altcoins over the same period, including Ethereum.

At the time of publication, the total crypto market was resting at $1.191 trillion, 43% below the $1.707 peak reached in November 2021.

Total altcoins market capitalization. Source: TradingView

The weekly relative strength index is in the overbought region at 83, suggesting that the altcoin market still favors the upside.

Independent analyst and X user ChiefRat takes notice of these overbought conditions and says that although he expects “the #altcoins market cap to make a new ATH in 2024,” there could be a test of the support at $960 billion.

“For now, we are moving mid-range. Resistance 1.25T, support $960B.”

Adding this, popular analyst Sheldon The Sniper said, “A squeeze from BTC and a drop in dominance will create a MEGA altcoin squeeze and rally,” adding that the market is “one step closer to a true altseason.”

However, data from CoinMarketCap shows that BTC still dominated the market at 51.77%. Moreover, the Altcoin Season Index by Blockchain Center has dropped to 49, meaning that the altcoin season is not here yet.

Altcoin season index. Source: Blockchain Center

Blockchain Center says an altcoin season can only be declared when “75% of the top 50 coins performed better than Bitcoin over the last season (90 days).”