- Bitcoin’s double-digit rise this week was fueled by new capital and extreme greed
- Is this rally just a blip, or the start of something bigger?
A week ago, Bitcoin fell to $89,000 – the lowest level in more than a month and a half. Fast forward to just seven days later and BTC is up 17% since then – Classic ‘buy the dip’ play. With the market so volatile, another 10% spike feels not only possible, but inevitable. So, are we looking at a $110,000 breakout now?
If greed doesn’t take over
Two major factors led to this double-digit increase in Bitcoin. First, inflationary pressures have eased, with the latest CPI report showing a dip that has calmed market nerves. Second, Trump’s return to the White House.
Coincidence or not, these events have paved the way for a possible Bitcoin breakout. The 69,79,000 addresses holding 82,12,000 BTC, acquired at an average price of $106,88,00, are now eyeing profits as the market moves closer to exceeding their purchase price.
Source: IntoTheBlock
The market is now in ‘extreme greed’ mode. Bitcoin closed yesterday at $104,000, and investors are going all-in. More than 15,17,000 BTC have been withdrawn from the exchanges at this price – pumping $1.5 billion into the market.
A $110,000 increase is starting to look more likely. But with so much capital at stake, a sell-off could be on the horizon. If $8.7 billion worth of BTC enters profit territory, we could see a massive sell-off. However, that’s just the beginning.
Picture this: 4.72 million BTC, purchased at an average price of $88,396,000, could create approximately $417 billion in market liquidity. With greed reaching ‘extreme’ levels, the stage is set for a sell-off that will turn countless property owners into billionaires.
There is no doubt that the outbreak is heating up. New capital is also flowing in and Bitcoin’s risk zone is buzzing. But how long can this rally last before the market turns around?
Temporary hype or a lasting trend?
Both institutional and retail investors are diving in, with FOMO now reaching new heights. Nothing illustrates this better than Trump’s memecoin (TRUMP) which exploded by a whopping 260% in the last 24 hours alone.
Source: TradingView
However, this memecoin frenzy is draining liquidity from Bitcoin, which has only managed a modest 1.57% increase over the same period. In fact, the line between the two is becoming increasingly blurred.
Read Bitcoin (BTC) price prediction 2024-25
As with memecoins, Bitcoin’s 17% rise has been driven by ‘hype’ and trends. Investors are chasing the broader market momentum, and FOMO is pushing the needle higher. What happens when the dust settles?
We’ve seen memecoins crash after the hype died down. Could Bitcoin be next? Although the rally is strong, it is still too early to call it a sustainable rally. With billions at risk, brace yourself for more volatility. If the “hype” disappears and “value” takes a back seat, we could see Bitcoin retreat to $90,000.