Amid turbulent conditions in the cryptocurrency market, leading market figures gathered in a broadcast hosted by renowned analyst Benjamin Cowen to examine Bitcoin's climb above $70,000 to the $72,000 level.

The discussion — featuring Benjamin Cowen, Guy, and Rob — covered the dynamics behind the leading cryptocurrency's sharp rise, macroeconomic factors, and critical predictions about the future of the markets.

Short Liquidations Drove the Surge

According to the analysts, the liquidation of short positions played a major role in the surge. Liquidations occur when leveraged traders betting on falling prices are forced to close their positions as the market rises, and the resulting wave of forced buying can amplify the move — which is why the analysts distinguished between squeeze-driven spikes and rallies underpinned by organic demand. The rapid rise in price was attributed to the ejection of approximately $2.6 billion worth of short positions within a short period, though the analysts noted that this alone would not be enough to initiate a sustainable bull run.

Analyst Guy pointed out that the bottom levels are likely behind us, but that a sustainable rally requires strong buying in the spot market rather than a squeeze in the derivatives market. The net capital inflow of more than half a billion dollars into spot Bitcoin ETFs — the funds approved by US regulators in January 2024 that have since become a key channel for institutional Bitcoin exposure, with their daily flows tracked as a barometer of demand — was noted as a positive development. In the event of a possible pullback, the $65,000–$67,000 range, which previously acted as resistance, could now become a strong support level.

Treasury Liquidity Move Reassures Markets

US Treasury Secretary Scott Bessent's announcement that the United States would double its bond repurchase operations as part of its liquidity support program was met with a strong market reaction. Under buyback programs, the Treasury repurchases older, less liquid outstanding securities, easing conditions in the world's largest government bond market — a channel that supports liquidity without the Federal Reserve formally expanding its balance sheet. Analysts stated that while this step was not a direct monetary expansion, it offered a critical intervention signal that instilled confidence in the market.

However, with the massive US national debt approaching $40 trillion and global geopolitical tensions persisting, investors have continued to gravitate towards hard assets to counter the depreciation of fiat currencies — a trend supporting the simultaneous rise in both Bitcoin and gold prices.

Ethereum Recovery and Altcoin Divergence

The situation in the Ethereum and altcoin market was also on the analysts' radar. They noted that Ethereum's parity against Bitcoin (ETH/BTC) — a ratio widely watched by traders as a gauge of Ethereum's relative strength against the largest cryptocurrency — has seen a noticeable recovery in recent weeks, and that institutional investors are showing interest in Ethereum, particularly because of its passive income (staking) opportunities, which allow holders to lock up their ETH to help secure the network in exchange for rewards.

At the same time, the analysts assessed that the general rally period — in which all altcoins rose simultaneously, as in past cycles — might be over, with the market entering a divergence phase in which only projects with real use cases and liquidity will survive.

Fed Policy Outlook

Finally, sharing their expectations regarding the Fed's interest rate policy, the analysts pointed out that inflationary pressures and geopolitical risks have not yet completely disappeared. They added that, in parallel with actions taken by central banks in countries such as the UK, Japan, and Australia, the possibility of an interest rate increase in the US should not be entirely ruled out. For crypto markets, the Fed's policy path remains one of the most closely watched macro variables, alongside inflation data and the Treasury liquidity measures discussed in the session.

*This is not investment advice.

Source: en.bitcoinsistemi.com