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Bitcoin Price Punches Above $48,000 Amid Strong ETF Inflows, Bullish Seasonality, Fading Miner Sell Pressure, US Equity Upside

On Friday, the price of Bitcoin briefly surged past $48,000, marking its highest point since the inception of spot Bitcoin ETF launches on January 11. At the latest update, it was up nearly 5.0% for the day.

Bullish momentum has once again gripped the Bitcoin (BTC) market, fueled by robust inflows into ETFs.

According to ETF.com, Thursday witnessed spot Bitcoin ETF inflows exceeding $405 million, ranking as the third most substantial influx in a single day thus far.

In addition to ETF activity, several other factors are bolstering the market, heightening the likelihood of a potential test of the $50,000 threshold in the near future.

Historically, Bitcoin tends to record significant gains around the time of the Chinese New Year celebration.

Markus Thielen, the founder of 10X Research and head of research at Matrixport, suggested in a recent note that over the past nine years, investors would have consistently profited by purchasing Bitcoin three days prior to Chinese New Year and selling it ten days afterward.

Thielen further projected that Bitcoin could potentially reach $52,000 by mid-March.

Additionally, CryptoQuant observed earlier this week a decline in miner sell pressure, based on on-chain data analysis.

The convergence of new ETF demand, reduced miner sell pressure, and favorable seasonal trends coincides with fresh record highs in the US equity markets. This week, the S&P 500 breached the 5,000 mark for the first time, marking a 1.5% increase.

Historically, positive sentiment in the equity market has tended to positively influence the price of Bitcoin.

Spot Bitcoin ETF Inflows Just the Tip of the Iceberg

The introduction of spot Bitcoin ETFs has marked a significant milestone in the financial landscape.

ETFs from BlackRock and Fidelity swiftly soared to $2 billion in assets under management (AUM), making them among the fastest in history to achieve this milestone.

Despite a notable decrease of over $6 billion in AUM, Grayscale’s GBTC still commands a substantial $20 billion in assets.

According to Blockworks, excluding GBTC, newly launched spot Bitcoin ETFs have amassed over $8 billion in AUM, an impressive feat considering it has not even been a month since their inception.

It’s evident that spot Bitcoin ETFs are here to stay, and they are poised to continue driving demand for BTC.

While initial flows have been impressive, many institutional investors remain on the sidelines. A recent Bloomberg article revealed that LPL Financial, a gatekeeper managing $1.3 trillion, is awaiting completion of due diligence on the newly launched spot Bitcoin ETFs before offering them to clients.

The inflows witnessed thus far into BTC through spot Bitcoin ETFs could be just the beginning of a much larger trend.

Where Next for the BTC Price?

The recent surge in demand for spot Bitcoin ETFs coincides with an impending supply shock in the Bitcoin market.

In April, the issuance rate to miners will halve, effectively reducing monthly miner sell pressure.

This dual impact of increased demand and decreased supply suggests that Bitcoin price risks are heavily skewed to the upside.

Furthermore, the potential for the Federal Reserve to cut interest rates later this year could provide additional tailwinds of liquidity.

The next significant target for the Bitcoin price is likely a retest of the 2024 highs at $49,000.

Given the current momentum, surpassing the $50,000 mark in the coming weeks seems increasingly probable.

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Cryptocurrency is essentially virtual money that operates in a decentralized manner, not through a bank but directly on multiple independent computers.

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