Bitcoin Hits $116,500 All-Time High Driven by Institutional Demand

Bitcoin has achieved a new all-time high, trading at approximately $116,500 and consolidating its gains. This surge is driven by strong institutional demand, including a significant $340 million leveraged long bet by the institutional trading firm AguilaTrades. This move is supported by a historic supply squeeze, with Bitcoin inflows to exchanges at their lowest levels since 2015, indicating reduced selling pressure and bullish sentiment.

The cryptocurrency's market capitalization has surpassed that of tech giant Alphabet (Google), demonstrating its remarkable strength. Bitcoin is currently consolidating in a tight range around $116,500 to $116,600, which technical analysts view as a bullish sign. This consolidation suggests that new buyers are absorbing profit-taking from earlier investors, creating a new, higher support level for the price.

The rally has been fueled by a combination of factors, including a massive short squeeze that liquidated hundreds of millions in bearish bets. Institutional demand remains robust, with consistent inflows into U.S. spot Bitcoin ETFs and large-scale "whale" investors steadily accumulating. This institutional confidence is bolstered by a weakening U.S. dollar, making hard assets like Bitcoin more attractive.

Three specific factors are driving this latest leg up in Bitcoin's price. First, there is a regulatory tailwind with positive sentiment around the confirmation of a new, pro-crypto leadership at the U.S. Office of the Comptroller of the Currency, signaling a more favorable regulatory environment. Second, the massive institutional bet by AguilaTrades indicates high conviction in Bitcoin's continued price rise. Third, the price has successfully broken and is holding above key Fibonacci resistance levels, a strong signal for technical traders that the uptrend is intact.

Underlying this strength is a classic supply squeeze. Bitcoin exchange inflows have fallen to just 18,000 BTC per day, the lowest since 2015. This reduction in selling pressure creates conditions for sustained price growth. Previously, in November 2024, inflows peaked at 81,000 BTC per day, coinciding with a price rally. Now, despite lower exchange activity, Bitcoin’s price continues to climb, reflecting bullish sentiment.

Key resistance remains at $115,000, with strong support around $95,000. If inflows stay muted, demand could outpace supply, pushing prices even higher. Additionally, Bitcoin's technical breakout from an inverse head and shoulders pattern, completed at around $109,000, suggests further upside. The golden cross formation, where the 50 EMA rises above the 200 EMA, adds to the bullish case, with a possible target beyond $120,000. Bitcoin’s macro breakout, combined with rising volume, suggests the rally could continue.