Bitcoin has surged past $124,000 after dipping into the mid-$120,000 range within the last day.
The cryptocurrency reached record highs above $126,000 earlier this week, but profit-taking by investors and a stronger U.S. dollar have challenged the “debasement-trade” dynamics. As of this moment, Bitcoin is priced at $123,962.
Many investors are increasingly using Bitcoin as a hedge against potential dollar devaluation, a strategy known in trading circles as “debasement trades.”
This week’s surge was driven by significant inflows into Bitcoin exchange-traded funds (ETFs) and speculative investments based on expected weakness in fiat currencies, especially during the ongoing U.S. government shutdown.
Bloomberg analyst Eric Balchunas reports that BlackRock’s IBIT led all ETFs in weekly inflows with $3.5 billion, representing 10% of total ETF net flows. All 11 original spot Bitcoin ETFs also experienced inflows, indicating robust demand for these products.
Having been launched just 21 months ago, IBIT is nearing $100 billion in assets under management, making it BlackRock’s most lucrative fund, outpacing even offerings that have been around for over two decades.
Nonetheless, the uncertainty surrounding the ongoing government shutdown, now in its second week, along with delayed economic data, has led some investors to seek safer assets, temporarily diminishing Bitcoin’s allure.
Will bitcoin go higher?
Analysts suggest that the recent pullback, which brought Bitcoin to approximately $122,000, is healthy and may pave the way for further increases.
Support is currently observed around $120,000, while resistance is identified at around $135,000. “Overall, dips are for buying,” noted market analyst Mags on X.
Onchain data indicates robust buying momentum. Glassnode reports that Bitcoin’s relative strength index climbed from 44 to 66 over the past week, signifying increasing market confidence.
The ongoing fiscal deadlock in the U.S. may be further increasing demand for perceived safe-haven assets. Geoffrey Kendrick, head of digital assets at Standard Chartered, believes Bitcoin could reach $135,000 soon and potentially $200,000 by year-end if current market conditions remain.
Gold continues its upward trend, supported by central bank purchases and expectations of future easing by the Fed.
Meanwhile, short-term Bitcoin whales—entities holding over 1,000 BTC acquired in the last five months—are sitting on approximately $10.1 billion in unrealized gains, according to CryptoQuant.
