Bitcoin's price surges fueled by record net inflows into ETFs. Analysts speculate on parabolic pattern. MACD suggests bullish trend. On-chain analysis hints at $90,000 potential. ETF demand likened to 'second halving'.
The value of Bitcoin skyrocketed to surpass $60,000 yesterday after experiencing record-breaking net inflows into Bitcoin spot exchange-traded funds (ETFs). This surge has prompted analysts to ponder whether BTC is following a parabolic trajectory characteristic of each cycle.
Over the past week, two analysts have drawn attention to how Bitcoin's recent price movements resemble the parabolic surges observed in previous cycles.
Experts Identify Repetition of Parabolic Bitcoin Surge
Dave the Wave, a cryptocurrency trader, indicated that the Moving Average Convergence Divergence (MACD) histogram hints at a recurring pattern of a four-month parabolic surge in crypto trading. The MACD (blue line) tracks momentum shifts by comparing the difference between an asset's 12-period and 26-month exponential moving averages against a signal line (orange).
When the difference exceeds the signal line, it indicates a bullish trend, while falling below suggests a bearish turn.
Over the last few months, the MACD line has consistently remained above the signal line. Concurrently, the MACD histogram's shape has taken on a parabolic form, indicating an imminent sharp price rise.
Recently, Kevin Svenson, an on-chain analysis expert, highlighted that Bitcoin reached the so-called "Base 3" price, touching a parabolic trend line at $45,000. If this trend persists, Svenson suggested a potential doubling to $90,000.
Yesterday, Bitcoin's price surged to $60,000. Meanwhile, Mike Novogratz of Galaxy Digital remarked on the uncertainty surrounding Bitcoin's future trajectory.
Thus far, the surge in Bitcoin spot ETF inflows seems to be the primary driver of the price surge. Yesterday, net inflows into Bitcoin ETFs reached a new daily high of $676.8 million, bringing the total amassed by ETF providers to $6 billion.
Could Bitcoin ETFs Represent a 'Second Halving'?
Charles Edwards of Capriole Investments likened the demand for Bitcoin from ETF providers to a "second halving," referring to the upcoming April 2024 Bitcoin halving event, which reduces the number of BTC released per mined block. Halvings, occurring approximately every four years, have historically catalyzed bullish movements in the asset.
This event, governed by Bitcoin mining software, halves the BTC miners earn from validating transaction blocks. Starting roughly from April 19, miners will receive 3.125 BTC for every successfully mined block, down from the current 6.25.
Occurring approximately every four years, this event ensures Bitcoin's status as a deflationary currency. Michael Saylor, the executive chairman of Microstrategy, the largest corporate holder of Bitcoin, previously noted that ETFs and mining would generate simultaneous demand and supply shocks.