Bitcoin’s Record-Breaking Performance: Understanding the Factors Behind Its Unprecedented Surge

$100K, $103K, $106K… – How is Bitcoin breaching one ATH after the other?

The price of Bitcoin has recently surged to a new all-time high of $106,000, defying expectations and shattering previous records. This unprecedented rally has left many wondering how Bitcoin is managing to breach one ATH after another. To answer this question, we must delve into the underlying factors driving this astronomical growth.

Firstly, it’s essential to note that institutional demand for Bitcoin has skyrocketed in recent times. A drastic decline in OTC desk balances, as revealed by CryptoQuant, underscores the aggressive accumulation of large investors. This substantial increase in institutional interest has undoubtedly fueled the cryptocurrency’s upward momentum.

Furthermore, apparent demand, which tracks net Bitcoin absorption, has seen a significant surge since November. The data highlights a consistent growth in demand as the market rally gained momentum. It is imperative to recognize that positive apparent demand dominates the current market environment, resulting from inflows significantly outpacing outflows.

The juxtaposition of these two factors – OTC desk balances and apparent demand – has catalyzed a supply squeeze, creating an ideal climate for Bitcoin’s record-breaking performance. This supply squeeze, fueled by institutional accumulation and diminishing available supply, has enabled the cryptocurrency to breach one ATH after another.

Additionally, a thorough examination of the price chart reveals a strong bullish sentiment. The price has formed a clear uptrend characterized by higher highs and higher lows, indicating an unrelenting market strength. Furthermore, Bitcoin remains comfortably above its 50-day and 200-day moving averages, underscoring ongoing support for this rally.

Moreover, trading volumes have increased during key upward movements, suggesting that both institutional and retail investors are participating in the price gains. The Relative Strength Index (RSI) is currently near 70, reflecting strong momentum but also hinting at a possibility of short-term consolidation as the market absorbs recent gains.

In conclusion, Bitcoin’s ability to breach one ATH after another stems from its fundamental attributes – the surge in institutional demand and the supply squeeze driven by diminishing available supply.

Source: ambcrypto.com