🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Bitcoin price today: Above $70k on halving hype; ETF flows, on-chain activity slow

Published 03/26/2024, 01:27 AM
Updated 03/26/2024, 09:38 AM
© Reuters
BTC/USD
-
BTC/USD
-

Bitcoin price rose briefly reclaimed the $71,000 handle on Tuesday before dropping back below. Although it has still stayed in sight of record highs amid anticipation of the upcoming halving event. However, signs of capital outflows and sluggish on-chain activity suggested that the token’s stellar rally could be slowing.

Bitcoin was trading up 1.1% in the past 24 hours at $70,058.7 by 13:59 ET (17:59 GMT). It surged as high as $71,572 in early trading before paring some gains. The world’s largest cryptocurrency is now not far off its record high hit earlier in March.

Relative strength in the dollar, ahead of more cues on U.S. inflation and the Federal Reserve, limited more gains in the token.

But Bitcoin recovered sharply from lows of around $60,000 hit last week, largely on anticipation of the halving event, which will see new supply of the token slashed by 50%. The event is set to occur some time in April with the generation of the 740,000th block.

Bitcoin miners' rewards will halve from 6.25 to 3.125 BTC after the upcoming halving. Historically, such events have boosted BTC's price, often leading to new highs in the months afterward.

Mehdi Lebbar, co-founder and CIO of Exponential.fi, told Investing.com on Tuesday that previous halvings and ETF approvals have taken their time to be priced into BTC "because it takes time for Bitcoin’s price to adjust to a new supply and demand dynamic."

"There is no six-figure price for Bitcoin that would surprise me by the end of the year,” he declared.

Bitcoin price upbeat, but ETFs see record outflows

Data from digital asset management firm CoinShares showed on Monday that digital asset investment products, such as exchange-traded funds, saw a record-high outflow of nearly $1 billion in the week to March 23.

Of the outflows, a bulk were driven by traders pulling out of Grayscale products, specifically its Grayscale Bitcoin Trust (NYSE: GBTC) ETF. Overall capital outflows from Bitcoin also amounted to about $904 million.

CoinShares said the outflows signaled some hesitancy among investors over further gains in crypto markets, which also saw inflows slow sharply from the prior week.

Still, the outflows come after a stellar seven-week run of inflows, which were triggered largely by the U.S. approval of spot Bitcoin ETFs earlier in 2024.

Bitcoin on-chain activity seen slowing

On-chain data from Glassnode showed that activity in the Bitcoin blockchain had slowed drastically in recent months, even as the token scaled new price peaks.

On-chain transactions were at a fraction of volumes seen during the 2021 bull run, Blockware Solutions analysts said in a recent note. This showed that major Bitcoin holders remained largely reluctant to trade their tokens.

But the lack of volumes and liquidity signaled that a bulk of Bitcoin’s recent price move was being driven by price speculation outside the blockchain- a trend that could herald more volatility in the coming weeks, especially if capital flows slow.

Bitcoin’s volatility has remained a main point of contention for potential investors, given that the token lost record highs just as quickly as it attained them.

[Ambar Warrick contributed to this article]

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.