• Bitcoin surged this week to a new 6-month high due to fears about traditional finance’s collapse.
• Inflation concerns have prompted many investors to move their funds into Bitcoin, resulting in strong demand for the cryptocurrency.
• Retail buyers and whales have both been accumulating BTC, but whale demand is still relatively low given that the market is still lower than its weekly high.
Inflation Fears Fuel Bitcoin Demand
Recent reports reveal that the US Federal Reserve reportedly printed $300 billion this week, which has put them in a tough position and undermined recent efforts to combat inflation. This has caused a loss of confidence in the banking industry, leading many investors to move their funds into Bitcoin as an alternative form of hard money.
Rally Triggered by Traditional Finance Concerns
The recent surge in Bitcoin prices is largely attributed to fears about traditional finance’s collapse. The news of Signature and SVB’s woes have further exacerbated these concerns, prompting many investors to shift their attention to cryptocurrency as an alternative safe haven asset.
Strong Demand from Retail Buyers
The latest surge in Bitcoin demand is more apparent among retail buyers. The number of Bitcoin addresses currently holding at least 0.01 BTC recently surged to a new historic high, indicating increased retail interest in the cryptocurrency.
Whale Accumulation Still Low
Whales have also been accumulating BTC over the past few weeks since 12 February; however, whale demand is still relatively low given that the market is still lower than its weekly high.
Sustained Upside Expected?
Assessing whether or not Bitcoin can sustain this rally will depend on how well it responds to inflation concerns and whether or not there will be short-term sell pressure or sustained upside moving forward.