Bitcoin hitting a record $104,091 is nothing short of remarkable – London Business News | Londonlovesbusiness.com

Bitcoin’s ascent past the psychological $100,000 mark to a record $104,091 was nothing short of remarkable, but the levels didn’t hold and we saw sellers play out all through US trade, culminating in a liquidity vacuum on the roll to Asia with price collapsing 6k before retracing the falls.

The surge was fueled by a confluence of robust capital inflows and bullish news, while the pullback underscored the risks of market-wide liquidations.

Institutional players remain pivotal in driving this rally. Spot Bitcoin ETFs have seen four consecutive days of net inflows, with a jaw-dropping $676 million recorded in just a single day. Industry heavyweights like BlackRock, Fidelity, and Grayscale have been key contributors, reinforcing Bitcoin’s growing appeal to institutional investors.

On the regulatory front, optimism surged following Trump’s announcement of Paul Atkins as the next SEC chairman. Atkins, seen as a crypto advocate compared to Gensler, has heightened expectations of a more crypto-friendly regulatory framework starting in 2025, injecting fresh enthusiasm into the market.

Adding to the positive momentum, Russia’s increasing crypto adoption has been a game-changer. Putin’s recent legislation recognizing digital currencies as property and exempting mining and sales from VAT has set a progressive tone. His pointed remarks on reducing foreign exchange reserves while showing a keen interest in Bitcoin have further bolstered sentiment.

Looking ahead, the focus is squarely on whether Bitcoin can reclaim $100,000 after this correction. I see the pullback as a healthy consolidation driven by short-term profit-taking. Bitcoin Fear and Greed Index, which peaked at an extreme greed level of 84 yesterday, has eased to a more sustainable 72, indicating a much-needed reset. The long lower shadows on recent candlesticks also signal that bulls remain resilient, preparing for another push higher.

The broader backdrop remains supportive. With strong performance in U.S. equities, solid economic data, and sustained institutional engagement, the case for further upside remains compelling.

However, the road ahead isn’t without risks:

1. Policy uncertainty: While Atkins’ nomination has sparked hope, Trump’s presidency doesn’t officially begin until January 2025. This transitional period may lead to profit-taking as institutions adopt a wait-and-see approach.
2. Leverage risks: Open interest in Bitcoin futures has hit a record 626,100 BTC, according to Coinglass, underscoring the heavy reliance on leverage. While it has amplified gains, it also leaves the market vulnerable to sharp reversals if liquidation triggers emerge.

Bitcoin’s volatility remains its hallmark. While the potential for growth is undeniable, navigating these risks will be crucial for traders and investors alike.