- In a dynamic turn of events, the price of Bitcoin soared above $51,000, marking its highest value since November 2021.
- Analysts are closely examining the recent surge in Bitcoin and Ethereum prices, particularly in the wake of the disappointing U.S. Consumer Price Index (CPI) data announced yesterday.
- Market experts attribute the recent rise in Bitcoin and Ethereum prices to the optimism triggered by significant inflows into Spot Bitcoin ETFs.
While the sharp rise in Bitcoin and Ethereum prices that started this week continues at full speed, we are detailing the affecting factors!
Bitcoin and Ethereum Rally: What’s Driving It?
In a dynamic turn of events, the price of Bitcoin soared above $51,000, marking its highest value since November 2021. Meanwhile, Ethereum climbed above $2,700, demonstrating a resistance level not seen since May 2022. This sharp rise in both crypto assets, amid uncertain market conditions, has stirred optimism and speculation in the market.
Analysts are closely examining the recent surge in Bitcoin and Ethereum prices, particularly in the wake of the disappointing U.S. Consumer Price Index (CPI) data announced yesterday. The CPI, considered a key measure of inflation by the U.S. Federal Reserve, reported a 3.1% increase, dampening market sensitivity. Although lower than December’s 3.4%, it exceeded market expectations of 2.9% and revised expectations for a U.S. Fed interest rate cut from June to July.
Let’s explore the potential reasons triggering the recent optimism among market participants. The recent rally in Bitcoin and Ethereum prices is supported by several key factors, including:
Investment in Spot Bitcoin ETFs
Market experts attribute the rise in Bitcoin to optimism triggered by significant inflows into Spot Bitcoin ETFs. Particularly, on February 13th alone, inflows into these Bitcoin ETFs reached a surprising $631 million, marking the largest single-day inflow since the beginning of last month.
Expectations for Ethereum ETF Approval
Expectations surrounding the potential approval of ETFs tied to the spot price of Ether have also increased investor sensitivity. The U.S. SEC is expected to make a final decision on Ethereum ETFs in May, and investors are anticipating a positive outcome, which could further boost the price of Ethereum.
Upcoming Bitcoin Halving
Investors seem to have their eyes on the anticipated Bitcoin Halving in April. This event aims to reduce the rate of Bitcoin supply, potentially leading to a new increase in Bitcoin’s value, and this effect could also strengthen the price of Ethereum.
Ethereum London Upgrade
The planned London upgrade for Ethereum on March 13th has added positivity to the market. Similar to previous rallies following significant upgrades, analysts expect a substantial increase in Ethereum’s value.
Increased Acceptance Following ETF Approval
The increasing acceptance of Bitcoin in the U.S. following ETF approval has instilled confidence in a similar trajectory for Ethereum. This integration and acceptance into the mainstream financial system are positive indicators for Ethereum’s future prospects.
As these factors continue to drive the current bullish market, investors remain cautiously optimistic about the future trajectory of both Bitcoin and Ethereum prices.
Explanation of Recent Price Performance
As Bitcoin surpassed $51,000, and Ethereum crossed $2,700, the cryptocurrency market is filled with excitement and speculation. Against the backdrop of economic uncertainties, the resilience demonstrated by these digital assets underscores their growing importance and relevance in the global financial landscape.
At the time of writing, the price of Bitcoin has increased by 2.87%, reaching $51,417.89, with a trading volume rising by 1.90% to $39.81 billion. Meanwhile, the price of Ethereum has risen by 2.58% to $2,755.31, registering an approximately 16% increase in the past seven days.
However, as Bitcoin rallies, Bitcoin Futures Open Interest decreased by 0.09%, reaching 454.60K BTC ($23.50 billion), according to CoinGlass data. In comparison, Ethereum Open Interest increased by 2.65%, rising to $9.73 billion.
Notably, the Bitcoin Fear and Greed Index at 74 levels indicate greed sentiment, which could encourage further price increases in Bitcoin.
