Bitcoin: Liquidity Crisis Could Lead to Exceeding Cyclical High

Bitcoin surpassed the $73,000 mark on Monday, thanks to the growth in ETF investments. This is a continuation of an upward trend for the cryptocurrency, and analysts are increasingly confident in reaching the $150,000 target in this cycle.

Experts claim that recent events only confirm their forecasts regarding Bitcoin. They emphasize considering institutional inflows of Bitcoin in their price predictions. An inflow of $10 billion is expected in 2024, with an additional $60 billion in 2025.

The increase in investments in recently launched ETFs coincided with the rise in the price of Bitcoin. According to BitMEX, on March 11, 2024, net profit amounted to $505.5 million. IBIT BlackRock led with an inflow of $562.9 million, increasing total assets by 0.12%.

Spot On Chain reported that on March 13, the inflow into Bitcoin ETFs reached $1.05 billion, setting a new single-day record. This growth was 108% compared to the previous day.

At the moment, all 10 ETFs have brought in $11.14 billion in 42 trading days since January 10. BlackRock (IBIT) owns 203,755 BTC, equivalent to $14.8 billion, competing with MicroStrategy but lacking 10,000 BTC.

According to CoinmarketCap, Bitcoin is trading at $73,434, with a 2.46% increase in the last 24 hours. The cryptocurrency's growth continues, with the next halving just a few weeks away.

In the context of the broader cryptocurrency market, bullish sentiments prevail for BTC ahead of the upcoming halving. This pump sparked significant interest as on-chain data demonstrated the activity of a smart whale who managed to earn over $200 million shortly before the price exceeded expectations.

This became a cause for optimism among traders and investors in the global cryptocurrency market as Bitcoin continues to reach new highs against the backdrop of the impending halving. Considering the bullish sentiment in the cryptocurrency market, derivative data further pointed to an upward trend for Bitcoin, reinforcing the optimism spurred by the substantial profits of the smart whale from selling Bitcoin.

According to data presented by the Lookonchain tracker, as the price of Bitcoin approached the $73,000 mark today, the smart whale deposited 100 BTC on Binance, one of the world's leading exchanges, to realize profits. Thanks to the sale, the address generated a profit of $217 million, attracting significant attention from cryptocurrency market investors. Considering that this whale accumulated BTC by August of last year, after the sale, there were still 4,300 BTC on this address amounting to $313 million.

This sparked optimism among traders and investors regarding Bitcoin's future potential to provide income to investors. With the recent introduction of Bitcoin ETFs, Bitcoin continued to attract attention on the crypto horizon.

Coinglass data demonstrated a significant increase in open interest and Bitcoin volume, rising by 2.89% and 28.82%, respectively. This intensified the bullish sentiment observed with Bitcoin, signaling an upward trend in the market that aligns with today's price increase.

The weighted average funding rate also increased, reaching $0.0635%, further emphasizing investors' readiness to invest more in long Bitcoin positions, contributing to a bullish sentiment towards the token.

However, cryptocurrency market enthusiasts closely monitor future changes in cryptocurrency prices as the RSI indicates overbought conditions, potentially signaling an inevitable consolidation phase.

Meanwhile, the CEO of CryptoQuant notes that Bitcoin ETFs actively absorb available BTC for purchase, and changes in supply dynamics are expected this year.

In this context, he expressed concerns about the ongoing increase in investments in spot Bitcoin ETFs, warning of a possible liquidity crisis on the selling side over the next six months.

He stated that in just the past week, net flows of spot Bitcoin ETFs exceeded 30,000 BTC, with major players owning around three million BTC, and 1.5 million BTC belonging to organizations in the United States.

Recent BitMEX Research data shows that spot Bitcoin ETFs have surpassed the $10 billion mark for the first time since their launch in January. This has raised concerns among market observers about potential future sell-offs.

CryptoQuant suggests that when spot Bitcoin ETF demand reaches a turning point, the BTC price may exceed market expectations. It emphasizes that a selling-side liquidity crisis could lead to surpassing the cyclical peak due to limited liquidity and a sparse order book.

Current trends indicate an increase in BTC, held by accumulation addresses. However, for a crisis to occur, these addresses must collectively own around three million BTC.

A significant inflow of capital is directed towards spot products such as Bitcoin ETFs in the U.S. market. For instance, on March 11, the net inflow into these products amounted to $505 million, with BlackRock leading with a daily inflow of $562 million. The VanEck HODL product also showed growth, with an impressive inflow of $118 million on the same day.

This surge can be attributed to a commission-free campaign initiated by VanEck, effective from March 12 to March 31, 2025. During this period, commissions will be waived until assets reach $1.5 billion, after which a 0.20% fee will be applied.