BTC Soars To Reach a Record High

BTC hit a new all-time high (ATH) this week after breaking above the $69,000 mark on Tuesday morning, setting a new high of $69,324. Before this week, the last time BTC set a record-setting price was November 2021. This marks the first occasion in which the price of BTC has set a new ATH before an upcoming BTC halving event. In previous cycles, new highs have been reached post-halving, which suggests a possible change in market conditions and a move away from the historical investment patterns related to the traditional four-year halving cycles.

The excitement of new highs was short-lived however, as many market participants took profit, including one miner who cashed significant holdings including some bitcoin that he held as early as 2010. Prices tumbled further later in the day, as a cascade of liquidations that totaled $1.1B over a 24-hour period sent the price of Bitcoin below $60k, according to Coinglass data. Given the steep run-up in prices over the past few weeks and skyrocketing derivative funding costs with open interest growing, the sharp correction wasn't a huge surprise and can be seen as a healthy recalibration of the market, allowing for more sustainable price appreciation going forward.

Funding rates have since come down significantly, and the price of BTC has returned to the $66k level. The decrease in annualized funding rates to below 20% from previous triple-digit figures suggests a market reset, potentially opening the door for a more stable and long-lasting move to more record highs. Meanwhile flows into the BTC ETFs continue to show strong demand, with over $1B of inflows since the start of the week.