BTC News: Unpacking Driving Forces Behind Bitcoin Rally Above $100,000

Today marks perhaps the most interesting day for BTC news. This because the cryptocurrency just achieved a highly coveted milestone by surging above $100,000.

So, here’s a breakdown of how it achieved this impressive feat.

Bitcoin bulls seemingly slowed down at the end of November after a strong run. Some downside in the first 3 days of the month gave the impression that sell pressure was building up. This may have set the market up for some liquidations.

According to Coinglass, Bitcoin liquidations on exchanges amounted to $136.41 million in the last 24 hours. In contrast, there was $45.86 million in long liquidations. So, how did Bitcoin sum up enough demand to push it above $103,000?

According to a recent CryptoQuant analysis, whale activity on Coinbase Premium and Binance may have fueled the momentum. The analysis suggests that strong bullish activity was observed when the 1-day moving average crossed over the weekly moving averages.

Assessing Bitcoin Spot and Derivative Flows

As noted earlier, whales have been pivotal in BTC’s latest rally. Bitcoin large holder flows surged considerably from 102.4 BTC on 1 December to 22,100 BTC on 3 December, signaling a strong demand wave.

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Although inflows have pulled back to about 5,180 BTC as of 4 November, they were still dominant compared to outflows.

There was a notable surge in outflows earlier in the week. However, BTC inflows in the spot segment surged considerably in the last 24 hours. Inflows peaked at $1.07 billion on 5 December.

The uptick in spot inflows confirmed a resurgence of strong demand. It also ended up being the highest single-day inflows that Bitcoin has achieved so far in 2024.

Bitcoin demand in the derivatives segment also mirrored demand in the spot market. The total amount of open interest peaked at $65.65 billion as at the time of observation. This was the highest level of open interest that the cryptocurrency has achieved so far.

A combination of strong demand from both the spot and derivatives segment contributed to the spike. It was also supported by positive ETF flows. Over $1 billion worth of positive flows went into ETFs in the last 2 days.

BTC News: Can Bitcoin Sustain the Bullish Momentum?

Aside from the healthy demand from key segments, it is worth noting that market sentiment and the right conditions have contributed to Bitcoin’s impressive milestone.

The U.S getting a pro-crypto president and prospects of favorable crypto regulations have influenced investor sentiment.

On top of that, numerous countries demonstrated a shifting stance in favor of BTC over the last few months. Fiscal policy also played a huge hand in the bullish outcome.

Declining interest rates paved the way for a shift in favor of investment in risk-on assets.

Many analysts expect Bitcoin to continue soaring, especially in 2025. In further BTC news, however, there will be pullbacks along the way and one may occur soon given that BTC was already in a bearish divergence at press time.

The pressure to cash out could eventually pave the way for some profit-taking especially as the weekend approaches. However, that remains to be seen as the bears get overshadowed by the recent strong demand.