Bitcoin New inflows into Spot Bitcoin ETFs and improving risk appetite have extended the cryptocurrency’s recent rally, pushing it closer to the $80,000 mark on Tuesday.
The flagship cryptocurrency rose 3.1% to $79,739.
The move extends a surge that began last week, when Bitcoin soared more than 20% in three days, its biggest three-day rally since 2023. This rally was partially fueled by a short squeeze, with over $4 billion of bearish positions in the cryptocurrency being liquidated as prices rose.
The rise came after the U.S. Treasury announced it would double its purchases of long-term government bonds. The move temporarily lowered yields and revived demand for risk assets, while rising concerns about inflation and government debt also spurred interest in assets considered scarce.
Demand from institutional investors has also returned. Last week, U.S. spot Bitcoin exchange-traded funds saw net inflows of $1.92 billion, the largest weekly inflow since October, when Bitcoin reached its previous cycle peak.
Still, questions remain as to whether the breakout can be sustained. Bitcoin has been in an extended downturn since October, and BTIG noted that a similar rally in January 2023 initially subsided before Bitcoin found support near its 200-day moving average.
Fundstrat said in a note on Monday that the buying following last week’s short squeeze suggests that Bitcoin’s rally may be “more durable than a tactical pullback.” It pointed to strong inflows to Bitcoin and Ether ETFs, increased trading, and an increase in stablecoins, which investors often use to purchase cryptocurrencies.
ether It last traded 2% higher at $2,494.
Options market activity suggests investors are growing confident that the bull market will continue, the research firm stressed. Unlike previous rebounds, where traders were primarily betting on short-term price increases, investors are now paying for exposure to even more future Bitcoin appreciation.
Fundstrat also noted that Bitcoin rebounded without any new purchases from Strategy, the world’s largest corporate holder of the cryptocurrency. Strategy hasn’t bought any Bitcoin in 2 weeks. If ETFs start buying again while demand remains strong, it could push prices even higher.
