Bitcoin Price $64,000 Question: Why BTC Stalled and What Happens Now

Key Takeaways

• Bitcoin price faces consolidation due to major ETF outflows after touching $64,000
• Trading volume concerns suggest the current rally might not be as strong as previous ones.
• Increased exchange inflows indicate potential volatility and selling pressure ahead.

Bitcoin price performance stayed strong on its path to $64,000. However, it encountered a pause in its rise on March 1, largely due to significant outflows from the Grayscale Bitcoin Trust (GBTC). On February 29, the spot Bitcoin ETF saw a net outflow of $600 million leading to consolidation.

Moving forward, Bitcoin should to respond to long-term stimuli like its halving and continued institutional interest in ETFs.

Understanding Bitcoin Price Consolidation

Bitcoin’s price rise stalling can be directly linked to substantial outflows from the Grayscale Bitcoin Trust. On February 29, Bloomberg data said GBTC experienced daily net outflows nearing $600 million. Despite the outflows, there was a notable $92m  positive flow within the ETF market, balancing the scales to some extent.

However, since Grayscale’s significant outflows offset the Blackrock inflows, it affected the overall market sentiment. Not only that, but it also contributed to the price consolidation.

Volume Concerns and Market Strength

A key concern for Bitcoin’s rally is the current trading volume, which is significantly lower than during previous peaks. Crypto commentator Hitesh  pointed out that, while Bitcoin has once again surpassed the $60,000 mark, the daily trading volume was close to $280 billion.

The figure is reportedly 66% lower than in 2021 during the last price peak with a volume of over $850 billion. This suggests a thinner trading volume supports the current price increase, potentially indicating a weaker rally.

According to CoinGecko market cap and volume charts from 2020 to 2024, crypto reached its peak in November 2021. At the time, the volume stood at around $125 billion with a $3 trillion market cap. On February 29, the volume was around $124 billion with a $2.4 trillion market cap. 

Exchange Inflows and Volatility Signals

Exchange inflows, which represent funds moving into exchanges, have seen a 103% increase over the seven days to March 1. Based on data by IntoTheBlock , the spikes in inflows often precede periods of heightened volatility. With inflows totaling $17.57 billion and outflows at $18.18 billion during the same period, there’s a clear indication that some holders might be preparing to sell, adding to the selling pressure on Bitcoin.

Despite these challenges, the outlook for Bitcoin remains optimistic in the long run. However, Blockstream CEO Adam Back puts a cap on Bitcoin price at $100,000. He says Bitcoin will rally to the level by April’s halving. The prediction is supported by factors like traders who bet against Bitcoin (leveraged shorts), a wait-and-see approach by raising profit-taking thresholds, over-the-counter (OTC) desks witnessing coin shortage, and buy orders for Bitcoin ETFs.

Avinash Shekar, the co-founder and CEO of Pi42, spoke to CCN on the future of Bitcoin price. He said: “With the prices subject to surge in the near future, the anticipation of a rally may push investors to put outsized bets on the asset. “

Looking Ahead to Bitcoin Price Trajectory

In conclusion, Bitcoin’s journey to $64,000 has been interrupted by profit-taking trades and ETF outflows, underlined by lower trading volumes, and increased exchange inflows volatility.

However, with expert predictions of significant price increases in the future, there ought to be continued interest from investors. Therefore, Bitcoin price could recover in the near-to-mid term.

About the Author

Shraddha Sharma

Shraddha has around five years of experience as a financial journalist, focusing largely on the Asian markets. Starting her career in Mumbai, India, as a news trainee and producer, she quickly found her niche in crypto. She is keen on learning how emerging technologies affect the broader markets and enjoys explaining complex financial ideas in a way that's easy to understand.

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