Bitcoin [BTC] continues to demonstrate its dominance in the cryptocurrency market. Following a period of consolidation and sideways movement, the leading digital asset reached a new all-time high by exceeding the $80,000 mark.
The digital currency experienced a surge of more than 5% in a 24-hour period and an impressive 18% increase over the past week, as reported by CryptoCrypto using data from CoinMarketCap.
Optimistic Environment for Expansion
The surge in Bitcoin’s value aligns with an overall bullish sentiment in the market, particularly after the SEC gave the green light to spot Bitcoin exchange-traded funds (ETFs) earlier in January.
Since their listing, approximately $26 billion worth of BTC has flowed into these funds, according to analyses conducted by CryptoCrypto on SoSo Value data.
Moreover, there has been a significant uptick in inflows following initial outflows from the Grayscale Bitcoin Trust (GBTC).
Currently, the assets under management (AUMs) for Bitcoin spot ETFs stand at close to $79 billion, representing 5.21% of Bitcoin’s total supply.
Factors beyond the realm of crypto may also play a role in Bitcoin’s recent performance.
Inflation has notably eased in recent months, and the job market has shown signs of improvement.
These positive trends led the U.S. Federal Reserve (Fed) to maintain a dovish stance, holding interest rates steady at the latest FOMC meeting.
Investors and policymakers widely anticipate that rates will remain unchanged in the upcoming meeting, with the potential for a rate cut later in the year if inflation remains under control.
Consequently, individuals are now more inclined to invest in risk-on assets such as stocks and cryptocurrencies.
Bitcoin’s Scarcity and Value Projection
The rising number of Bitcoins being locked into spot ETFs has created scarcity in the broader market.
As a result, the supply on exchanges has continued to dwindle, as indicated by Crypto’s analysis of Santiment data.
Currently, about 9% of Bitcoin’s total circulating supply is held on exchanges, a decline from nearly 12% at the beginning of 2024.
While the supply side tightens, demand remains robust. Unlike previous bull cycles, the 2024 Bitcoin rally is being driven by both retail and institutional interest.
Data from Glassnode, analyzed by CryptoCrypto, reveals a notable increase in whale entities holding 1K coins, along with a rise in addresses with non-zero balances since the start of 2024.
Preparing for New All-Time Highs
The favorable conditions of diminishing supply and increasing demand could propel Bitcoin to unprecedented highs in this cycle.
Renowned technical analyst Ali Martinez previously forecasted that the market’s peak would likely occur between November 2024 and February 2025.
Hence, surpassing $80,000 appears to be just the beginning as Bitcoin sets off on its journey upward. It seems that the rocket has ample fuel for reaching the moon!