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Bitcoin continued its surge on Wednesday, shooting above $63,000 for the first time since November 2021.
The price of the flagship cryptocurrency was last higher by 6% at $60,461.92, according to Coin Metrics. Earlier, it briefly touched $64,000 even before turning lower. It’s now sitting just below its all-time high of $68,982.20.
Both bulls and bears have been getting whipsawed by the sharp price movements. Over the past 24 hours, $176 million in short liquidations and $86.1 million in long liquidations occurred across centralized exchanges, according to CoinGlass.
When traders use leverage to short bitcoin and the cryptocurrency’s price rises, they buy bitcoin back from the market to close their positions, which pushes the price up and causes more positions to be liquidated. By contrast, traders betting on a price increase must sell their assets to cover their losses.
With the record in clear sight, the market has been even more motivated to see that level retested. Bitcoin has soared nearly 20% this week alone, after a week-long pause of this year’s rally. It’s now up more than 40% for 2024.
Bitcoin, 5 years
Antoni Trenchev, cofounder of crypto exchange Nexo, said to expect some resistance as bitcoin nears $69,000 but that breaking through $60,000 should whet the appetite of investors who have sat this year’s rally out – particularly retail investors. According to JPMorgan, their interest in crypto has rebounded this month after a pause in January.
Investors are expecting it to set a new record this year after the launch of ETFs made the asset class more accessible to institutional investors, and with the network’s upcoming halving event, which historically has set the stage for a major rally in the months that follow.
“Bitcoin demand is colliding with increasingly tight supply,” said Zach Pandl, head of research at Grayscale Investments. “The new U.S. spot bitcoin ETFs have pulled in an average of $195 million per calendar day in February, whereas the Bitcoin network currently produces [about] 900 coins per day — or about $54 million worth of bitcoin, assuming a price of $60,000.”
“Given the approaching Bitcoin halving in April, issuance will fall by half … There is simply not enough bitcoin to accommodate all the new demand, and so natural supply/demand dynamics are driving prices higher.”
The halving, an event mandated in the Bitcoin code, reduces the bitcoin mining reward by half in order to limit the supply. The next halving is expected to take place in April.
The move initially gave a lift to bitcoin-related equities, which gave back some gains after the cryptocurrency pulled back. Bitcoin proxy Microstrategy jumped 11% and the miner Marathon Digital rose 5%. Block, which operates a bitcoin trading service and holds the cryptocurrency on its balance sheet, gained about 1%.
Crypto exchange Coinbase gave back earlier gains after its users reported zero balance errors in their accounts and issues buying and selling.