What The MVRV Tells Us About BTC Price Trend Above $47,000

Technology

Bitcoin’s Supply and Demand Imbalance in Limelight; Price Surge Ahead? – Crypto News

Published

1 year ago

March 1, 2024

Dripp

Bitcoin prices shot up to $63K during an upbeat trading session on Thursday. The bullish trading sentiments were buoyed by an increase in inflows for Bitcoin ETFs and risk appetite for investors. However, one elephant in the room that hasn’t been recognized yet is the supply and demand imbalance.

Bitcoin Demand Stays Higher Than Supply

In an interview with Yahoo Finance, Bitwise CIO Matt Hougan said that there is currently an excess of demand and a shortage of supply for Bitcoin. With a supply crunch for the OG cryptocurrency, the likelihood of people paying huge sums for a small portion of asset exposure becomes likely.

Hougan also added that the upcoming Bitcoin halving will further change the demand and supply dynamics for Bitcoin. After the having occurs, the reward for mining new blocks will be halved. In such a situation, the supply of Bitcoin is likely to stay lower than the demand. If sentiments persist, the situation will likely give a good boost to prices after the halving occurs.

Bitcoin ETF Growth Keeps Prices Afloat

On February 28, spot Bitcoin exchange-traded funds (ETFs) saw a $673 million net inflow. The milestone was the biggest inflow since the U.S. SEC authorized spot Bitcoin ETFs in January. Massive $8 billion in trading volumes were reported by all spot BTC ETFs, with BlackRock leading the way.

It is safe to state right now that the upward momentum could last for some time given the recent gain in the price of Bitcoin and the spike in demand for ETFs. Because the return on investment (ROI) for Ethereum and BTC is higher than that of other assets like gold, oil, stock exchanges, and other assets, Wall Street investors are dumping capital into Bitcoin ETFs. The Crypto Fear & Greed Index has reached a close that is four years higher than before. As of right now, the market is exhibiting “Extreme Greed,” as indicated by the levels of 80.

Bitcoin Prices Right Now

The price of BTC previously surged above $63,000 and is now only a small percentage behind the peak of $68.7K set 27 months ago. In addition, there has been a 150% increase in trading volume during the past 24 hours. The rise suggests that traders are becoming more interested in jumping on the BTC bandwagon. At the press time, the prices for BTC stood at $61,389.25, being around 1% up as compared to the same time last day.