Bitcoin Surges 13.6% as Hot Capital Influx Drives Price Above $30,000

Bitcoin has entered a new phase of speculative fervor, with a significant influx of new participants. The cryptocurrency has seen a remarkable resurgence, breaking back over the $30,000 mark in May after a period of decline in April. This surge is evident in the performance of ProShares’ Bitcoin Strategy ETF (BITO), which has surged 13.6% in value over the past week. The average price of Bitcoin on March 24 was $29,877.81, while the average price in April was $25,995.44, indicating a notable increase in value.

This renewed activity signals a shift from a period of consolidation and dormancy to a phase of heightened speculative interest. Since April 21, there has been a significant influx of hot capital into the Bitcoin market, with a sharp uptick in the appearance of risen capital in recent days. As of April 28, the hot capital in Bitcoin has risen from $20.7 billion to $39.1 billion, reflecting a serious uptick in short-term holder activity and speculative capital entering the market.

In May, speculation about meteoric increases in Bitcoin’s price reached a fever pitch. By May 8, the top crypto had surged to nearly $30,000, a level not seen in some time. This rapid ascent has been driven by a significant increase in hot capital, which rose by more than $21.5 billion from March 23 to May 8. This trend is supported by the behavior of Bitcoin holders, with First Buyers and Momentum Buyers showing strong engagement, while Profit Takers have been only moderately active. This suggests ongoing demand from new and trend-following participants without significant distribution.

Long-term holders of Bitcoin, Ethereum, and many altcoins are not selling aggressively, indicating that they are either holding their assets or using them in ways that do not involve selling. Meanwhile, new, trend-following buyers are entering the market, driving demand for a wide range of cryptocurrencies. Ethereum has also begun to show early signs of similar activity, with First Buyers of ETH dramatically increasing for the first time since February. However, Ethereum is seeing an uptick in Profit Taker activity, suggesting that demand is being met with more resistance from existing holders who are cashing in their gains. This could limit short-term price gains unless demand grows much faster than this new supply.

Market analysts see this as a balancing act, with new capital coming into ETH markets but also new supply. This could limit short-term price gains unless demand grows much faster than this new supply. Either way, the renewed interest from First and Momentum Buyers is a promising development for ETH as it looks to rebuild. Short-term capital is rotating faster, and new market entrants are ramping up their exposure, both Bitcoin and Ethereum seem to be moving into a make-or-break moment. For Bitcoin in particular, the inflow of hot capital and the inclination of profit takers to hold rather than sell creates a very supportive atmosphere for this rally. If it keeps going, we might well look back on this moment as the start of another big leg up in the crypto bull cycle.