The popular cryptocurrency Bitcoin is back again with an all-new record. Today, it nearly crossed the $100,000 mark. Bitcoin rose 1.9% to $98,870.4 by 01:17 ET (06:17 GMT). The cryptocurrency hit a record high of $99,289.3 earlier in the session and was up 9.1% this week.
According to several crypto analysts, the reason behind this rise is the positive response among crypto investors and enthusiasts. This has been associated with the current friendlier U.S. regulations. In addition, there has been increased interest in options trading, which has boosted crypto.
Can Bitcoin regain its crown?
Bitcoin (BTC) has recently set new highs continuously this week. The last jewel on the crown was added today by breaking through $99,000 and being just one step away from $100,000. However, the conundrum still continues: Can BTC break through $100,000, or will there be a pullback after the breakout? Both situations are possible. Here are the reasons that might lead to a “rise or fall” in crypto in the coming future.
The main reason behind the continuous rise of BTC could be associated with institutional involvement. There have been large net inflows into BTC ETFs this week. By Wednesday, BTC ETFs had achieved a net inflow of $1.8 billion. Reportedly, MicroStrategy purchased 51,000 BTC last week at a cost of $88,617 each. They also announced future plans to raise $2.6 billion to continue purchasing Bitcoin. Additionally, other popular mining companies are in discussions to issue $850 million in convertible bonds to buy BTC. The sudden rise in buying power of traditional funds could be one of the main reasons for the future rise of crypto. Reportedly, the open interest in BTC contracts rose to about $63 billion, with a daily increase of $6 billion. This is another reason for a positive future in the crypto market.
However, BTC’s implied volatility (IV) has risen to 60, which indicates a higher probability of large market fluctuations in the future. Additionally, short-term capital has a tendency to lock in profits. This could lead to large price swings around the $100K mark.
Industry reacts
Looking at the future of the crypto market, the CoinSwitch (a crypto platform) market desk highlights that with a 2.5% gain in the last 24 hours, BTC shows strong momentum. However, profit-booking near this psychological milestone could also spark volatility.
On the other hand, naysayers argue that if Bitcoin reaches $100,000, it could act as a psychological barrier where investors might reassess their positions. This could eventually lead to a natural sell-off point, as seen in other asset classes when significant round numbers are breached. “If BTC breaks through $100K, there is a high probability of a pullback. However, the entry of long-term institutional funds suggests that BTC’s price is far from this point,” Gracy Chen, CEO of Bitget, concluded.
