Although the price of bitcoin is still declining, $251 million in new money has entered spot Bitcoin ETFs, demonstrating the robustness of the markets. On February 20, BTC ticked down $51,663 recording its greatest daily close in more than two years; however, the $52,500 resistance proved to be a more formidable obstacle than anticipated, leading to a rejection below $51,000 on February 23. On February 22, the funding rate of BTC futures contracts momentarily revealed an excess of demand for short positions, causing conjecture about possible additional downward momentum.
Bears have little reason to celebrate since BTC achieved a 33.5% year-to-date gain in 2024. However, some experts think the $1 trillion market capitalization at $50,930 may signify a local high. Even though this level is only a round number and has no intrinsic meaning, the media has focused on it, which might frighten investors.
Spot Bitcoin ETF Inflows Will Probably Control The Price Of BTC
Analysts and traders have offered several explanations for why there might be a correction in the price of Bitcoin. These include divergences in the Relative Strength Index (RSI), selling Bitcoin-related stocks, a historical lack of bullish momentum 60 days before the halving, and the possibility that 2.5% of the supply was probably bought near $51,500.
But if there is continued net inflow into the spot BTC exchange-traded fund (ETF), then none of these theories should be taken seriously. The net inflow of $251 million was recorded on February 22, countering the $36 million outflow that had been seen the day before on U.S.-listed Bitcoin ETFs.
Since it is almost hard to forecast demand for Bitcoin ETFs, the focus should instead be on trading data to see whether traders are becoming more pessimistic following several unsuccessful efforts to keep prices over $52,500. Inverse swaps, or perpetual contracts, have an inherent rate that is updated every eight hours.
