Bitcoin recorded one of its most impressive daily performances in recent history yesterday when it pumped from a daily low of $53,600 to just over $58,000.
Here are some of the possible reasons behind this surge while the community speculates whether the worst has passed and BTC could resume its 2024 bull run.
ETF Flows
Ever since their inception in mid-January this year, the US spot Bitcoin ETFs have played a significant role in the underlying asset’s price movements. Trends of positive flows have led to price increases and vice versa.
As such, it wasn’t a big surprise that BTC tumbled hard in the past few weeks, from over $64,000 (on August 26) to under $52,500 (on September 6). Within this timeframe, the ETFs saw almost $900 million in net outflows.
However, the trend changed on Monday, and investors broke the longest negative streak in the history of ETFs. The net inflows for the day exceeded $28 million, and this could be among the most probable reasons behind BTC’s price resurgence.
Going Against the Crowd
The popular crypto analytics tool, Santiment, has repeatedly outlined a certain strategy that’s relatively unpopular among the community. After all, it advises traders to go against the crowd, which seemed to have worked in the past day.
The latest report informed by traders had ‘heavily’ shorted BTC on major exchanges like Binance and BitMEX since Saturday. According to Sentiment, “trader FUD and doubt in this rally will only fuel prices higher.”
Bitcoin’s market value is finally rallying, making it as high as $57.6K Monday and +4.8% in the past 24 hours. On major exchanges like Binance & Bitmex, Bitcoin has been heavily shorted since Saturday. Trader FUD and doubt in this rally will only fuel prices higher. pic.twitter.com/1uY1AaQBLx
— Santiment (@santimentfeed) September 9, 2024
Stablecoins Inflows
Another possible reason behind BTC’s impressive daily surge could be attributed to investors trying to take advantage of the price dip. This is supported by data from IntoTheBlock, which reads that $300 million worth of stablecoins were transferred into exchanges on Monday.
Stablecoins are the easiest gateway for investors to purchase digital assets on exchanges. Such large movements are typically executed to look for good buying opportunities, such as the recent price dips.
$300 million worth of stablecoins flowed into exchanges yesterday, signaling a potential move by investors to capitalize on the dip. pic.twitter.com/c7CTrqc8oT
— IntoTheBlock (@intotheblock) September 10, 2024
Back in early August, when BTC’s price tumbled even lower (under $50,000), the total stablecoin inflows skyrocketed to around $1 billion. Days later, the cryptocurrency, alongside most of the market, recovered its losses and even soared past $65,000 in weeks.
Something relatively similar on the matter came from Lookonchain. The on-chain resource informed that larger bitcoin investors had withdrawn more than $34 million worth of the asset in the past day alone. This could reaffirm the thesis that investors have used the opportunity to go on a buying spree.
