Bitcoin hits $71,000, analysts: next target is $83,000

In the last week of March, Bitcoin rebounded strongly and returned to the $70,000 level. According to Bitpush terminal data, as of the close of the U.S. stock market, BTC once reached $71,239.31, with a 24-hour increase of 8%. Ethereum rose 7.4% to $3,634.80.

Among the top 10 cryptocurrencies by market cap, Solana (SOL) and Avalanche (AVAX) have seen the biggest gains in the past 24 hours, with Solana (SOL) up more than 9% and AVAX soaring 8.87% from $53.60 to $58.30 in the past 24 hours.

In addition to the cryptocurrency market, major U.S. stock indexes experienced a small bearish adjustment. The S&P 500 fell 0.12% and the Nasdaq fell 0.14%. But crypto concept stocks rose sharply, with MicroStrategy soaring 21% and Coinbase rising 9%. The crypto mining industry was also boosted by Bitcoin, with Riot Platforms rising 9%, CleanSpark rising 19%, and Cipher Mining rising 13%.

BTC supply on Coinbase hits nine-year low

In terms of exchange supply, on March 18, Bitcoin reserves on Coinbase reached a nine-year low of 344,856 BTC. According to data provider Glassnode, the last time BTC reserves on Coinbase were at a similar low was in 2015, indicating that investors have resumed accumulating BTC outside exchanges.

According to CryptoQuant data, on March 25, the total Bitcoin reserves of all exchanges reached 1.92 million, a three-year low, which means that the price of Bitcoin may still have more room to rise as the supply of Bitcoin on exchanges is at a historical low and the demand for ETFs has attracted billions of dollars in inflows .

Markets ignore outflows from spot Bitcoin ETFs

The market seemed to shrug off outflows from U.S. spot Bitcoin ETFs last week, with Grayscale Bitcoin Trust (GBTC) continuing to see outflows and a slowdown in subscriptions to BlackRock and Fidelity products. Ten spot products experienced their worst week since their inception in January this year, with GBTC recording $1.9 billion in outflows last week.

Data from BitMEX Research shows that BlackRock iShares saw total inflows of $828.3 million last week, well below the $2.48 billion seen in the week ending March 15. Investor buying interest in new funds from companies such as BlackRock and Fidelity Investments was not enough to offset the selling by Grayscale holders.

Analysts said Grayscale's outflows were due to fees much higher than its competitors and selling by the bankruptcy trustee.

Grayscale chose to keep management fees on its converted ETFs at 1.5%, compared with 0.25% for the BlackRock funds and even lower fees from rivals, including fee waivers, said Bryan Armour, an ETF analyst at Morningstar.

Grayscale has faced other challenges. Last week, digital wealth management provider Wealthfront said it would replace Grayscale’s ETFs with iShares funds as an alternative, citing their low fees and high daily trading volumes.

“Given the total expense-cost ratio and the actual buy and sell costs in terms of bid-ask spreads, we think IBIT is the most attractive overall,” said Alex Michalka, vice president of investment research at Wealthfront.

“Any time you have an asset that reaches an all-time high there tends to be profit taking,” or at least a slowing of the pace of buying, said Adam Sze, head of digital asset products at ETF provider Global X.

It turns out that the key to reinvigorating Bitcoin ETF flows may lie not only in more price stability but also in greater signs of interest from institutional investors.

Kyle Da Cruz, director of digital asset products at VanEck, said that so far, most trading activity has been dominated by individual investors and some hedge funds, and spot ETFs are still an emerging asset class that "sticky money" has not yet entered.

“Despite the drag from ETF inflows, buy orders around $60,000 remain high, suggesting the market is eager to buy on dips,” said Nathanaël Cohen, co-founder of digital asset hedge fund INDIGO Fund.

Bitcoin Price Targets $83,000 or Higher

Bitcoin has been in correction mode for the past week after hitting an all-time high of $73,797.68 on March 14. Last Wednesday, Bitcoin fell to a low of around $60,800, a drop that Galaxy Digital’s head of company-wide research, Alex Thorn, believes is “entirely consistent with the normal short-term correction of historical bull markets.”

Sam Callahan, chief analyst at bitcoin service firm Swan Bitcoin, said this may be related to the message sent by the Federal Reserve last week.

Sam Callahan said in an interview with Bloomberg: “Fed officials made it clear last week that they are considering cutting interest rates and slowing the pace of quantitative tightening this year. Such actions will improve liquidity conditions and become a positive catalyst for asset prices. Bitcoin acts as a barometer of liquidity conditions and responds positively to the Fed’s news that monetary policy may be relaxed in the near future.”

Bitcoin could hit a new all-time high after breaking out of a consolidation pattern, analytics firm 10x Research said in a report on Monday. The report said that based on a symmetrical triangle formation, a chart pattern in technical analysis, the breakout could signal a push for BTC to $83,000.

The report highlights that Bitcoin tends to perform well in U.S. election years (2024 is one of them), with historical gains of 100%-200%, which also supports the case for price increases later this year.

10x founder Markus Thielen said: "Our upside targets of $83,000 and $102,000 may slowly come into play . "