3 Possible Reasons Behind Bitcoin’s $4,000 Daily Surge

Bitcoin posted one of its most impressive daily performances in recent history yesterday when it rose from a daily low of $53,600 to just above $58,000.

Here are some of the possible reasons behind this surge as the community speculates whether the worst is over and BTC could resume its 2024 bull run.

ETF flows

Since their inception in mid-January of this year, local US Bitcoin ETFs have played a significant role in the price movements of the underlying asset. Positive flow trends have led to price increases and vice versa.

As such, it wasn’t a huge surprise that BTC fell sharply in recent weeks, from over $64,000 (on August 26th) to below $52,500 (on September 6th). In that time period, ETFs saw nearly $900 million in net outflows.

However, the trend reversed on Monday and investors snapped the longest losing streak in ETF history. The day’s net inflows exceeded $28 million, and this could be one of the most likely reasons for BTC’s price resurgence.

Going against the crowd

The popular crypto analytics tool, Santiment, has repeatedly outlined a certain strategy that is relatively unpopular with the community. After all, he advises traders to go against the crowd, which seemed to have worked the other day.

The latest report reported by traders had shorted BTC “heavily” on major exchanges such as Binance and BitMEX since Saturday. According to Sentiment, “trader FUD and doubt in this rally will only push prices higher.”

Bitcoin’s market value is finally recovering, reaching $57.6k on Monday and +4.8% in the last 24 hours. On major exchanges like Binance and Bitmex, Bitcoin has been heavily shorted since Saturday. Trader FUD and doubt in this rally will only drive prices higher. pic.twitter.com/1uY1AaQBLx

— Santiment (@santimentfeed) September 9, 2024

Stablecoin inputs

Another possible reason behind BTC’s impressive daily rise could be attributed to investors trying to take advantage of the price drop. This is supported by data from IntoTheBlock, which says that $300 million worth of stablecoins were transferred to exchanges on Monday.

Stablecoins are the easiest gateway for investors to buy digital assets on exchanges. Such large moves are usually executed to look for good buying opportunities, such as recent price drops.

Yesterday, $300 million worth of stablecoins flowed into exchanges, indicating a possible move by investors to capitalize on the drop. pic.twitter.com/c7CTrqc8oT

— IntoTheBlock (@intotheblock) September 10, 2024

In early August, when the price of BTC fell even further (below $50,000), total stablecoin flows soared to $1 billion. Days later, the cryptocurrency, along with most of the market, clawed back its losses and even topped $65,000 within weeks.

Something relatively similar to the theme came from Lookonchain. The on-chain resource reported that the largest bitcoin investors had withdrawn more than $34 million from the asset in the last day alone. This could reaffirm the thesis that investors have taken the opportunity to go shopping.

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