Key Points
- Bitcoin (BTC) has reached its highest-ever weekly close, but faces resistance to further increases.
- Spot exchange-traded funds (ETFs) are contributing to Bitcoin's price volatility.
Bitcoin, the largest cryptocurrency, has started a new week with fluctuating prices and new record highs. The volatility of Bitcoin's price remains a significant factor.
Price Volatility and Resistance
While Bitcoin has achieved its highest weekly close ever, there is substantial resistance to it breaking higher. The ongoing price discovery battle sees Bitcoin in a familiar state of flux, with selling pressure at key psychological price levels and the continuous bid from spot exchange-traded funds (ETFs).
The influence of ETF buying has caught many off guard. Even long-term bulls are reassessing their expectations for the BTC/USD exchange rate in the coming years. Some are warning that the accelerating bull run could trigger a macro BTC price top sooner than expected.
Miners and Macro Data
As Bitcoin is at a crossroads, miners are taking advantage of the situation to lock in profits before April's block subsidy halving. Upcoming U.S. macro data will likely set the tone for the Federal Reserve's decision on interest rates.
Bitcoin experienced significant volatility leading up to the March 10 weekly close, which turned out to be the highest in history. Despite reaching $69,000, the high was short-lived as a sharp downside wick took BTC/USD to $67,120 minutes later.
Spot ETFs and Bitcoin
As the week begins, market observers are waiting for the resumption of buying by the spot ETFs. This successful ETF launch has presided over a BTC price transformation that many expect to continue.
Despite the upcoming halving exposing miners to 50% less new BTC per block, miners have significantly increased their selling around the highs. This has been observed throughout 2024, with outflows from miner wallets beginning with the launch of the ETFs on Jan. 11.
Hodlers and Selling Resistance
Despite the inbound price discovery, seasoned Bitcoin hodlers are keeping their coins firmly in their wallets. Data shows long-term holders not yet matching transfer volumes seen during 2021, the year when BTC/USD first hit $69,000.
The largest recent spike of around 72,000 BTC in fact occurred on Feb. 24, with $70,000 and higher so far not generating a larger single-day tally. The net unrealized profit/loss for long-term holders, while strong, is not yet at levels systematic of a blow-off top.
