Bitcoin Surpasses $50,000 with Strong ETF Inflows, Ethereum Gains Momentum

Bitcoin’s price surged past $50,000 on Monday, reaching its highest level in over two years. This rally was supported by strong inflows into spot bitcoin exchange-traded funds (ETFs) and signs of institutional accumulation. Earlier in the day, Bitcoin was trading around $48,000 before experiencing a sudden rally to as high as $50,300 during the U.S. trading session.

However, the $50,000 level posed resistance as sellers stepped in to take profits, causing the uptrend to stall. At the time of writing, Bitcoin was trading slightly above $50,000, up nearly 4% in the past 24 hours. It outperformed the broader market’s CD20 index, which had a 3% advance. The CD20 index was hovering around 1,871, just below its intraday all-time high of 1,875 on January 11.

Ether (ETH), the second-largest cryptocurrency, also saw gains as it surpassed $2,600 and rose 5.5%. This was driven by asset manager Franklin Templeton filing for a spot Ethereum ETF. Last week, there was a notable increase in institutional interest in ETH, with market participants anticipating the decision on a spot ETH ETF later this year. As a result, native tokens of Ethereum layer 2 networks, such as Immutable X (IMX), Optimism (OP), and Lido’s token (LDO), also experienced significant rallies of 12%, 9%, and 7%, respectively.

Bitcoin’s price action was further supported by strong inflows into spot bitcoin ETFs, attracting over $1.1 billion in net fresh funds. This occurred as outflows from incumbent funds like Grayscale Bitcoin Trust (GBTC) and ProShares’ futures-based ETF (BITO) slowed down. However, there is a potential selling pressure from Genesis, a crypto lender under bankruptcy protection, as it liquidates its $1.6 billion worth of GBTC holdings. This could impact ETF net inflows and prices in the coming months, according to a report by asset management firm CoinShares.

Macro analyst Noelle Acheson believes that Bitcoin’s current rally is driven by increased accumulation, mainly due to expectations of capital injection in China to stabilize its stock market and the anticipated currency depreciation in developed countries. Acheson also noted the continued spread of Bitcoin awareness through ETF marketing efforts.

Markus Thielen, from 10x Research, set a price target of $52,000 for Bitcoin in mid-March. He believes that Bitcoin’s breakout above $48,000 and the recent buy signal indicate a strong possibility of a rally towards the $52,000 target. In the past, similar price setups have led to an average rally of 8% in two weeks.

Overall, Bitcoin’s price surge above $50,000 is driven by strong ETF inflows and signs of institutional accumulation. The market is closely watching for any potential selling pressure from Genesis and the decision on a spot ETH ETF, which could impact prices in the coming months.