In Friday's Asian trading session, Bitcoin surged to a new all-time high, touching $118,000 per coin. This remarkable rise can be attributed to several key factors:
Market analysis suggests that traders expect Bitcoin's price to continue rising. Open interest on the Deribit exchange is concentrated on call options with strike prices of $115,000 and $120,000. These contracts extend to later expiration dates, such as the end of September and December, with contracts reaching as high as $140,000 and $150,000.
Chris Newhouse, Research Director at DeFi trading firm Ergonia, stated that the options market reflects strong bullish sentiment. He noted that the market experienced a significant short squeeze before Bitcoin surpassed its all-time high, indicating that short positions were overextended and vulnerable to buying pressure.
In March, President Trump signed an executive order aimed at establishing a strategic cryptocurrency reserve. He also appointed crypto-friendly individuals to key positions, such as the SEC Chairman and the White House AI Czar.
Furthermore, Trump's family ventures have entered the cryptocurrency space. Trump Media & Technology Group is seeking to launch an exchange-traded fund (ETF) to invest in cryptocurrencies, including Bitcoin.
CCN analyst Victor Olanrewaju pointed out that Bitcoin's ability to maintain its current level is due to the lack of selling pressure from long-term holders (LTH) despite significant profits. Glassnode data indicates that the change in LTH supply exceeds the monthly issuance of new coins.
Beyond institutions and long-term holders, retail investors also play a crucial role in supporting Bitcoin's price. These investors contribute to absorbing the new supply of Bitcoin and maintaining market equilibrium.
Glassnode data shows that the combined Bitcoin balance held by these groups is growing at a rate of +19.3k BTC per month, exceeding the current monthly issuance rate of +13.4k BTC. This further demonstrates a tightening supply environment as a large cohort of holders continues to absorb newly issued Bitcoin.
It's important for potential investors to understand that the cryptocurrency market, including Bitcoin, is known for its volatility. Prices can fluctuate significantly in short periods due to various factors, including market sentiment, regulatory changes, and technological advancements. While the current trend is bullish, past performance is not indicative of future results. Thorough research and risk assessment are crucial before considering any investment in Bitcoin or other cryptocurrencies. Consider consulting with a financial advisor to determine if such investments align with your financial goals and risk tolerance.
Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.
