Bitcoin Hits All-Time High $111,970, Faces Resistance at $112,000

Bitcoin (BTC) has experienced a significant rally, reaching an all-time high of $111,970 on Thursday. However, the cryptocurrency has since paused its upward trajectory, consolidating around recent highs and trading marginally down during the ongoing session, hovering around $111,000 after encountering resistance around $112,000. This pause in the rally comes after BTC shattered the $110,000 level, driven by growing investor confidence, institutional interest, and the advancement of a pro-crypto stablecoin bill, which has fueled hopes for regulatory clarity.

Despite the recent pullback, analysts remain optimistic about Bitcoin's future prospects. According to Alankar Saxena, Co-founder and CTO of Mudrex, institutional inflows have helped BTC maintain sustained momentum, with Spot ETFs seeing significant net inflows. Additionally, the US Dollar Index has dropped, making crypto an attractive hedge against inflation. Saxena believes that the rally will resume after a brief pullback as overall sentiment remains bullish. BTC is currently stabilizing between $110,000 and $111,000, with bulls eying the $115,000 level as the immediate target.

However, the market conditions are overbought, which could lead to a pullback. BTC registered a notable decline on Monday, starting the previous week in the red. The price recovered on Tuesday but fell back in the red on Wednesday. On Thursday, BTC plunged to an intraday low before recovering to register a marginal increase. Price action turned bearish on Friday and Saturday, but the price recovered on Sunday, rising over 3% to cross $106,000. The current week saw BTC start in the red, facing considerable selling pressure, but it rebounded on Tuesday and continued to push higher on Wednesday and Thursday, reaching a new all-time high before settling at $111,582. The current session sees BTC down nearly 2%, with buyers losing momentum after encountering resistance around $112,000. The RSI also indicates overbought conditions, so the pullback is along expected lines.

Meanwhile, Strategy, a firm led by Michael Saylor, has announced plans to offer and sell up to 10% of its perpetual Strife preferred stock to expand its Bitcoin holdings beyond the current 576,230 BTC. The offering comes at $0.001 per share, which will allow the company to raise $2.1 billion to fund future Bitcoin acquisitions. Strategy's holdings are valued at approximately $64 billion at current prices, representing an unrealized profit of $24 billion. The firm has been on an aggressive Bitcoin buying spree, revealing its latest acquisition on Monday, announcing the purchase of 7,390 BTC for $764.9 million at an average price of $103,498 per coin.

Bitcoin futures open interest (OI) hit record levels on crypto derivatives exchanges as traders anticipate the asset will continue its rally. Open interest hit a peak of just over $80 billion, representing a 30% increase since the start of the month. An increase in open interest indicates a build-up of leveraged positions in the market as traders hold positions with borrowed money. If the price moves against these leveraged positions, traders get liquidated, creating a rapid price decline. Bitcoin options markets are demonstrating a similar pattern, with open interest of over $1.5 billion at the $110,000 and $120,000 strike prices at the Deribit exchange. There is also over $1.5 billion in open interest at strike prices of $115,000, $120,000, and $130,000.