Hitting a new record-high price traditionally leads to profit-taking by some market participants. For example, whales (>1,000 BTC) have begun selling off assets since March, causing their number to drop from 2,159 to 2,055.
Image source: lookintobitcoin.com
long-term holders (LTH) have exhibited the same behaviour. Their stocks fell by 660,000 since their November peak. BTC. Each cycle, this group accumulates coins in a bear market to profitably sell during a new rally.
Image source: glassnode.com
Demand gradually gets saturated, and the price consolidates or a correction occurs. This time around, the balance of power has shifted significantly in favour of buyers due to the approval of spot ETFs in the US and the opening of direct access to cryptocurrency to trillions of dollars worth of capital.
We're now in the third month since the ETFs launched, and demand for Bitcoin is only getting stronger. On 12 March, net inflows set a record of $1 billion. Among fund managers, BlackRock set a new high by adding $849 million in one day.
Image source: twitter.com/EricBalchunas
Daily capital inflows into Bitcoin have reached $2 billion per day, according to analyst agency Glassnode.
Image source: twitter.com/woonomic
Because of the overweighting of buyers, the price is rising almost without correction.
Image source: StormGain Cryptocurrency Exchange
Analysts are predicting a quick correction based on signals from technical indicators. A correction can only occur if capital inflows weaken, but there are no signs of that happening right now. Moreover, major investment platforms are just getting into the game by adding ETFs to their trading instruments.
Investment bank JMP Securities predicts that inflows into spot ETFs will accelerate, causing the total volume of funds to grow to $220 billion in the next three years, with Bitcoin reaching $280,000 per coin.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)