Bitcoin (BTC) has had a pretty hectic week that has led it to try out new three-year highs. We’ll tell you what happened.
Bitcoin (BTC) has had a historic week after conquering several key levels that have placed it very close to reaching its historical maximum.
TOP Bitcoin News (BTC)
The last week in the crypto market has been particularly busy for Bitcoin, so today we’ll tell you the most important news so you don’t lose sight of them.
BTC gets the vaccine boost and flirts with the USD 17,000
Bitcoin, the climber
Bitcoin put on all the sports equipment to scale up the price levels this week. We started the week with a crypto that had a valuation of USD 15,984, how was it possible for it to climb to USD 18,063? That’s the question we’ll try to answer and the answer you’ll have to keep in mind for next week.
On Monday we started with good news for humanity: The Moderna Labs‘ vaccine announced positive results for its COVID-19 vaccine.
The news was a boost for the stock market, but also for Bitcoin. In fact, it was this boost that brought Bitcoin to USD 16,788 on Monday.
Did Bitcoin settle for that? No, on Tuesday the leading crypto increased another 5.33% to USD 17,680, achieving a three-year high and a historical maximum for its market capitalization of USD 330 billion.
Again, we ask ourselves, were you satisfied with that? And, once again, the answer is no. On Wednesday, Bitcoin received another boost that took it to USD 18,476, however, it didn’t resist and fell back to levels close to USD 18,000.
Bitcoin Experiences the Forces of Supply and Demand
Is a bubble forming? Is the Law of Supply and Demand explained with Bitcoin?
As we’ve just seen, this week Bitcoin received a series of boosts that took them to levels we haven’t seen in three years. Therefore, it’s normal for the crypto community to start wondering what’s behind this boost.
Especially when we consider those crypto investors who lived through the misfortune of 2017.
This week, Chainalysis published an investigation which gave as an explanation the Law of Supply and Demand. Basically, Chainalysis stated that „the price of Bitcoin is rising because the demand for BTC is increasing at a time when there are relatively few Bitcoins available to buy.
According to the research, the amount of Bitcoin kept in non-liquid wallets is much higher than in 2017, representing 77% of the 14.8 million Bitcoins extracted.
Consequently, only 3.4 million Bitcoins are available on the market and demand seems to be increasing.
Okay, but could it be possible that a bubble is forming? This week we reported in CryptoTrend that although Bitcoin’s current bull run seems to be very different from 2017, there were two indicators that generated concern: the Fear & Greed Index and the Mayer Multiple.
In particular, the Fear & Greed Index was, and still is, marked by extreme market sentiment. In addition, the Mayer Multiple, as we explained at that time, stood at 1.76, very close to the worrying level of 2.
Bitcoin tried the $18,000, but was rejected, is a bubble forming?
What are the projections for BTC?
Enthusiasm in the crypto market has impregnated investors in the traditional world and has given a lot to talk about.
Tom Fitzpatrick, managing director of Citibank, predicted that the price of BTC could exceed USD 318,000 in 2021 in a note that was leaked this week.
In that note, Fitzpatrick called BTC the „new gold. In the same vein, Rick Rieder of BlackRock assured CNBC that Bitcoin could replace gold.
Also this week, Bloomberg strategist Mike McGlone noted on Twitter that Bitcoin is on its way to a $1 trillion market capitalization.
According to McGlone, $20,000 will be the main obstacle Bitcoin will have to overcome to reach a market cap of $1 trillion.
Regarding Bitcoin’s market cap, this week the leading crypto reached its historical maximum and surpassed Mastercard, PayPal, Nvidia and even Disney in this metric.
The close relationship between Bitcoin’s scarcity and its price
Bitcoin’s Open Interest in CME Futures Reaches Record High
The Chicago Mercantile Exchange (CME) saw an increase in open interest in Bitcoin futures, reaching an all-time high of $976 million.
This translates into an increase in institutional capital inflows to Bitcoin. And it turns out to be positive for Bitcoin because it could be the next crypto boost.