Is the pullback over? Bitcoin is heading towards $60,000

Bitcoin has finally rebounded, surging to $57,100 today from a low of $52,998. The entire crypto market plunged for two weeks after the flash crash on February 22, known as “Bloody Monday.” The signal was much-needed relief for bulls, indicating that investor sentiment has turned in favor of the bulls, increasing the likelihood that Bitcoin will rush to $60,000.

According to BitPush today, Grayscale's parent company Digital Currency Group (DCG) plans to purchase Grayscale Bitcoin Trust (GBTC) worth up to US$250 million.

In addition to the continued involvement of institutional investors, overall interest in Bitcoin continues to grow. Recent data shows that 10,000 Bitcoin ATMs have been installed in the United States since March 1, 2020, marking a 57.5% increase in the number of Bitcoin ATMs installed over the past year.

According to CrossTower head of trading Chad Steinglass, “the fundamentals for Bitcoin remain incredibly sound,” as major traditional financial players appear to be participating in Bitcoin transactions on a daily basis.

Steinglass said the recent addition of Ethereum by Chinese software company Meitu to its balance sheet was another positive development as it shows the growing prominence of cryptocurrency in traditional finance.

The demand and confidence of retail and institutional investors in the cryptocurrency market continues to rise. The trading platform Robinhood released a blog post titled "Crypto Goes Mainstream", which mentioned that the platform had more than 6 million new crypto users in the first two months of 2021 alone. Considering that the number of monthly registrations in 2021 is 15 times the average level in 2020, this fully demonstrates that retail investors' views on cryptocurrencies have changed.

With Bitcoin (BTC) hitting a low of $43,700 on Feb. 28, Jay Hao, CEO of crypto exchange OKEx, said a price pullback was expected given the early stages of the bull run.

Square was the first major institution to buy the dip, increasing its holdings by 3,318 bitcoins on February 23, worth approximately $170 million at the time.

MicroStrategy CEO Saylor announced on February 24 that the company had purchased an additional 19,452 bitcoins, worth about $1 billion at the time. The following week, on March 1, he revealed that the company had purchased an additional 328 bitcoins, worth $15 million at the time.

The most notable Bitcoin price pullback occurred on March 12, 2020, also known as "Black Thursday," and this price drop may reflect the cyclical nature of the Bitcoin asset. Shane Ai, who is responsible for crypto derivatives product development at cryptocurrency derivatives exchange Bybit, said: "Historical price seasonality in March is unfavorable for Bitcoin. Knowing this, traders will be more cautious when going long."

This price seasonality is also evident in the Crypto Fear & Greed Index, which, based on a value of 0 indicating extreme fear and 100 indicating extreme greed, has historically fallen to lower levels in March compared to pre-March levels of this year.

North America’s first two bitcoin exchange-traded funds (ETFs) launched in Canada amid the market downturn. Both ETFs have proven popular despite the market downturn.

The fact that Bitcoin ETFs have performed well despite the market decline is another sign that institutions view the recent decline as a healthy correction and an opportunity to buy more Bitcoin at a lower price.

The 2021 crypto bull run has brought many new investors to the cryptocurrency market. Some investors are attracted to this asset class because Bitcoin has a high rate of return compared to traditional investments such as stocks, commodities, and bonds. But these investors are not accustomed to the volatility of the cryptocurrency market.

Therefore, when the price reached $44,000, there was a massive sell-off in the Bitcoin market, which was evident in Coinbase’s outflow data.

Jay Hao, CEO of crypto exchange OKEx, elaborated on the phenomenon: “Many new investors are uneasy about market volatility, and we often see this kind of panic selling when prices quickly pull back.”

He further added: “As prices see intermittent pullbacks on the way up, we will continue to see the weak players get squeezed out.”

Whether the decline was caused by panic selling by investors or was simply a healthy price correction after the market peaked in early February, it’s clear that institutions are not frightened by the volatility. They appear to welcome the drop in Bitcoin prices because it gives them the opportunity to buy more Bitcoin at a lower price.