Bitcoin’s price has surged to the coveted $71,000 mark, a milestone not seen since April 12. The crypto community is now pondering whether the bull market is just beginning or nearing its peak. Analysts believe that Bitcoin’s price is on its way to new highs now that the recent consolidation phase has concluded.

Related: CME Group is Preparing to Move Top Players by Entering the Spot Bitcoin Market

Let’s delve into the factors driving Bitcoin’s price surge, including the increasing likelihood of an Ethereum ETF approval, improving market forecasts, significant short position liquidations, and notable cryptocurrency outflows from exchanges.

What’s Driving Bitcoin’s Price Surge?

Bitcoin (BTC) has surpassed the $71,000 mark for the first time since April 12. This surge in optimism stems from recent comments by Eric Balchunas and James Seyffart, ETF analysts at Bloomberg Intelligence, regarding the approval of a spot Ethereum ETF.

Ethereum ETF Approval

The ETF analysts have increased their chances of a spot Ethereum ETF approval from 25% to 75%. Balchunas cited increased political pressure on the SEC as a reason for the revised forecast. Amidst these developments, the price of Ethereum (ETH) has soared nearly 20% in just 24 hours. Bitcoin also experienced a surge, seeing its price increase by roughly 7%.

Improving Forecasts 

Moreover, the chances of approval have risen to over 61% on prediction platforms like Polymarket.

Source: Polymarket

Position Liquidations

Bitcoin’s price jump has led to significant market liquidations. Prior to these events, investors had been accumulating Bitcoin, indicating bullish sentiment.

“An entire month’s worth of short Bitcoin positions just got liquidated. There’s one more level to overcome to reach historical highs,” noted Bitcoin analyst Willy Woo.

Source: Coinglass

Data shows that 79,714 traders faced liquidations in the last 24 hours, with total liquidations amounting to $348.13 million. Specifically, $273.82 million was liquidated from short positions, while $74.31 million came from long positions.

Crypto Outflows

The outflow of cryptocurrency from centralized exchanges is typically seen as a positive sign. It suggests that investors are holding onto their assets in anticipation of further price increases, rather than planning to sell in the short term.

In the past week, investors have withdrawn 30,516 BTC, worth approximately $2.17 billion at current market prices, from 20 cryptocurrency exchanges.

The largest outflow was seen on Coinbase Pro, with 14,416.43 BTC withdrawn, followed by Binance, where investors withdrew 8,631.02 BTC.

Bitcoin Exchange Reserves at an All-Time Low

Adding to the bullish vibes, Bitcoin exchange reserves have plummeted to a seven-year low. According to CryptoQuant, as of May 19, only 1,918,417 BTC are available on major trading platforms, a significant drop from the previous year.

Source: CryptoQuant

This shortage, combined with the recent halving that cut potential new supply from miners in half, creates a bullish setup for Bitcoin.

More Info:

All of the above factors together create a bullish environment that could propel Bitcoin to new all-time highs. While the crypto community speculates on whether this marks the beginning of a new bull run or the peak of one, the current market dynamics suggest a strong upward momentum. As Bitcoin continues to break barriers, we’ll be watching closely to see how these elements play out in the coming weeks and months.

Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice of this sort, HODL FM strongly recommends contacting a qualified industry professional.