Key Takeaways
- Bitcoin climbed to a two-year high above $65,000 in early Monday trading, driven by spot Bitcoin ETF inflows and anticipation of the cryptocurrency’s April halving event.
- Investors view Bitcoin halving events as a bullish catalyst because they reduce the rate at which new Bitcoins are created, helping to increase the asset’s scarcity.
- Bitcoin’s prior record close at $69,000 may provide near-term resistance, but could become a support area after a successful breakout.
Investors remain focused on Bitcoin (BTC) this week after the largest cryptocurrency by market capitalization climbed to a two-year high above $65,000 in early Monday trading as record inflows into spot Bitcoin exchange-traded funds (ETFs) and anticipation about the asset’s April halving event continue to drive bullish sentiment.
The Bitcoin funds, which began trading on Jan. 11 after receiving regulatory approval from the Securities and Exchange Commission (SEC), have helped fuel a 50% gain in the pioneer cryptocurrency since the start of the year as a wave of new institutional money enters the asset class.
Between their January debut and the end of last month, Bitcoin ETFs have seen net inflows exceed $7 billion. “The flows are not drying up as investors feel more confident the higher price appears to go,” Markus Thielen, head of research at 10x Research in Singapore, was quoted by Reuters as saying.
Looking ahead, investors have turned their attention to Bitcoin’s April halving, an event that occurs every four years and reduces mining rewards by 50% for validating transactions on the Bitcoin blockchain. Investors typically view halvings as a bullish catalyst because they reduce the rate at which new Bitcoins are created, helping to increase the asset’s scarcity.
Like other risk-on assets, Bitcoin continues to benefit from expectations that the Federal Reserve will begin cutting interest rates later this year, but also remains subject to increased volatility amid an uncertain macroeconomic backdrop.
Bitcoin’s price has continued to trend higher since a bullish golden cross signal appeared on the weekly chart in late December last year. In the coming days, investors should keep an eye on the cryptocurrency’s record high at $69,000 set in November 2021. This closely watched level may provide resistance in the near term, but could also become a new area of support after a successful breakout.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.