There are two key factors that may affect a short-time bull case for Bitcoin. The factors are institutional accumulation and other altcoins profits cycling into BTC.
The price of Bitcoin reached a new all-time high of $25,005.53 as the world celebrates Christmas. At press time, Bitcoin has pulled in more gains, up 3.59% to $24,837.57. Since the mid-march lows, the value of Bitcoin had grown by nearly five times and currently has increased by over 240% since the year began.
Recently, Bitcoin has been pulling in significant gains, which have made the leading digital asset a topic of discussion, especially on Twitter. The top coin reached a new high of $24,000 on the 19th of December, shortly after trading at over $20,000 for the first time on the 16th.
An earlier report by Coinspeaker revealed that BTC had generated more than 92,000 tweets as the king coin records continuous increases.
Bitcoin Hits New High on Christmas Day
After BTC traded at $24,000, the crypto asset fell and hovered around $23,000 for a while. Now, the world’s most valuable digital asset has set a new all-time mark about a week to 2021.
According to a report by Cointelegraph, the direction of the next Bitcoin rally seems unclear as analysts and traders survey short-term bear and bull cases. Analysts are concerned that Bitcoin will fall as the Bitcoin futures’ funding rate has increased and it is now less-compelling to long BTC.
On the 25th of December, the founding partner at Bitazu Capital, Mohit Sorout posted a chart on Twitter, showing BTC’s high funding rate. He added that he would be “utterly surprised” if the price of BTC just continues to surge.
Similarly, crypto derivatives trader Edward Morra said in a tweet.
Deriv traders weren’t buying the dip lower but instead turning omega bullish at the top again, classic. Now, spot chads will flush them, send premiums and funding to baseline and continue after a local correction. pic.twitter.com/Y0qDCsrcoF
— Edward Morra (@edwardmorra_btc) December 25, 2020
The Cointelegraph report further noted that some traders believe that the high futures funding rate is an important tool for a strong bull run. Pseudonymous Bitcoin trader Salsa Tekila stated:
“Shorting ATH during price discovery bull trend based solely off of funding while hoping for a Wyckoff top seems extremely stupid to me. Funding was 0.375 (max) for weeks in 2017 bull trend.”
Short-Time Bull Cases for Bitcoin
In addition, the report noted two factors that may affect a short-time bull case for Bitcoin. The factors are institutional accumulation and other altcoins profits cycling into BTC.
Over time, Bitcoin has seen a significant increase in the number of institutional investors, especially during the global economic meltdown caused by the coronavirus pandemic. Also, other altcoins have been recording lesser gains compared to BTC.
Per institutional Bitcoin investors, digital currency asset management Grayscale highlighted the firm’s updated total AUM. The firm now holds $16.3 billion in total assets under management. Out of the total AUM, Grayscale Bitcoin Trust is more than $14 billion. This shows the rise in BTC institutional investors.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.