Bitcoin surges 2.9% due to spot ETF inflows, pushing the price to a record high of $71,166 on Binance

• Bitcoin has surged a notable 2.9% in the past 24 hours, with the price reaching $71,166 on Binance, the highest since May 21, largely driven by inflows into the US spot Bitcoin ETF.
• Significant inflows into these ETFs included a record $886.6 million, led by major players such as Fidelity and BlackRock.
• “Fidelity is no joke, and today The Ten’s total revenue is nearly $1 billion. It’s our second-best day since mid-March,” said Eric Balchunas, Bloomberg ETF analyst.

Bitcoin surged above $71,000 on the back of strong ETF inflows, representing significant price movement since May. Find out the key drivers of this rally with our detailed analysis.

What is causing the Bitcoin price rise?

The recent Bitcoin price surge is largely due to unprecedented inflows into U.S. spot Bitcoin ETFs. The sector reported net inflows for the 16th consecutive day, hitting a one-day high of $886.6 million. Fidelity’s record $378.7 million led the charge, followed closely by BlackRock, which invested $274.4 million in ETF investments. Other notable contributions included Ark with $138.7 million, Bitwise with $61 million, and Grayscale Bitcoin and VanEck Bitcoin Trusts with $28.2 million and $4 million, respectively.

Analyst Insights and Market Reactions

Eric Balchunas, a prominent Bloomberg ETF analyst, provided insight into these significant inflows, highlighting the significant momentum in the ETF market. He said: “Fidelity is not kidding, today The Ten’s total revenue is almost $1 billion. This is the second best day since mid-March. Net revenue was $3.3 billion over the past four weeks and $15 billion YTD (estimated 12-month high). “The ‘third wave’ is turning into a tsunami,” he said.

However, prominent cryptocurrency analyst Byzantine General pointed out that the price surge could have been much more significant without substantial passive supply on spot exchanges. This passive supply provided a form of resistance, mitigating the impact of large ETF inflows on the Bitcoin price.

Short squeeze potential

Despite the positive dynamics, liquidation of short positions in the BTC futures market has been minimal, with short liquidation amounting to only $27.58 million in the last 24 hours, according to Coinglass data. Willy Woo, a prominent on-chain analyst, highlighted that a continued rise could trigger a significant short squeeze, potentially triggering a series of liquidations. “Knocking 72k is the fuse set to start the liquidation cascade,” Woo said. $1.5 billion in short positions ready to be liquidated up to $75,000, a new all-time high.”

conclusion

In summary, Bitcoin’s recent price surge above $71,000 was primarily driven by strong inflows into US spot Bitcoin ETFs, reflecting heightened investor interest and confidence. Significant passive supply on spot exchanges has tempered the rally somewhat, but significant selling pressure is likely to occur if prices continue to rise. Investors should remain alert and watch these key dynamics as the market evolves.