Bitcoin Price Surges to $71,200, Driven by Positive Sentiment Around ETH Spot ETF

Bitcoin Price Surges to $71,200, Driven by Positive Sentiment Around ETH Spot ETF

On Tuesday, May 21, 2024, Bitcoin's price reached $71,200, primarily fueled by a crypto rally amidst optimism about the Ethereum spot Exchange-Traded Fund (ETF). Bitcoin's price soared to $71,292, marking a 6% increase in the past 24 hours. This rise signals positive sentiment for the overall crypto market, especially since the largest cryptocurrency by market capitalization had faced difficulties over the past month due to macroeconomic factors.
Image: Bitcoin price chart. Source: TradingView

Typically, Bitcoin is the main driver in the crypto market. However, this rally was led by Ethereum (ETH), which surged by 19% in recent hours amid speculation that the U.S. Securities and Exchange Commission (SEC) will approve the ETH spot ETF.

Increasing Bitcoin Scarcity

In addition to the positive news about spot crypto ETFs, Bitcoin's price increase was also driven by the asset's supply scarcity. Bitcoin reserves on many crypto exchanges continue to decline, reaching their lowest level in seven years. Data from CryptoQuant shows that only 1.91 million BTC are currently available across various exchanges.

The reduced supply of Bitcoin on exchanges can be interpreted as a bullish signal, as fewer coins are available for sale. This means that a surge in demand could lead to even higher price increases.

Besides Bitcoin and Ether, other cryptocurrencies such as Solana (SOL), BNB (BNB), and XRP (XRP) also saw significant price increases, with rises of around 3%-5%, according to CoinGecko data.

Conclusion

The surge in Bitcoin's price to $71,200 on May 21, 2024, highlights a wave of optimism in the crypto market, primarily driven by speculation about the approval of an Ethereum spot ETF by the SEC. This positive sentiment has not only boosted Bitcoin but also significantly increased Ethereum's value and positively affected other major cryptocurrencies like Solana, BNB, and XRP. Additionally, the decreasing supply of Bitcoin on exchanges, reaching its lowest level in seven years, indicates a bullish trend as reduced availability typically leads to higher prices amid rising demand. Overall, the current market dynamics suggest a strong upward trajectory for the crypto market, fueled by both positive regulatory expectations and supply constraints.

Read too : Bitcoin Spot ETF Gains Traction, Inflows Reach $726 Million

Disclaimer:

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