Bitcoin Surges: 3 Reasons Behind Price Increase

The price of Bitcoin (BTC) has surpassed $70,000 once again after a week of negative flows into spot Bitcoin exchange-traded funds (ETFs). On March 25, BTC climbed from $67,212 to an intra-day high of $70,306. Currently, BTC is trading at $70,268, up 7.5% in the last 24 hours. This recovery comes after a period of price decline that saw the cryptocurrency drop to as low as $60,771, accompanied by negative ETF inflows.

Last week marked the end of a 7-week cycle of inflows into crypto investment products, with investors withdrawing over $942 million, according to a report by CoinShares. This marked the first outflow following a record 7-week run of inflows totaling $12.3 billion. The outflows were attributed to the recent decline in crypto prices, which resulted in a $10 billion reduction in total assets under management. Bitcoin accounted for 96% of the outflows, totaling $904 million.

Bitcoin’s Age Consumed metric has seen a notable spike recently, indicating increased activity on the network. Age Consumed tracks the movement of previously idle BTC coins and spikes in this metric suggest potential price volatility. The surge in Age Consumed suggests that dormant BTC addresses are re-entering circulation, leading to higher transaction volume and potentially signaling price jumps in Bitcoin.

Altcoins performed well last week, with notable inflows into Polkadot (DOT), Avalanche (AVAX), and Litecoin (LTC). Several large-cap altcoins, including BNB, Dogecoin (DOGE), and Toncoin (TON), outperformed Bitcoin over the past week. Bitcoin has still outperformed most altcoins, including Ethereum, over the same period.

The total crypto market currently stands at $1.191 trillion, 43% lower than its peak in November 2021. The weekly relative strength index suggests that the altcoin market is overbought, indicating a potential upside. Analysts believe that the altcoin market could reach a new all-time high in 2024 but warn of a test of support at $960 billion. Despite speculation of an altcoin season, BTC still dominates the market at 51.77%, and the Altcoin Season Index suggests that the altcoin season has not yet arrived.