The cryptocurrency market is in a state of euphoria as of Wednesday, February 28. Bitcoin showed an increase of more than $60,000, which is a 6.5% increase in one day.
The total market capitalization increased by 3.5% over the last day. According to CoinGecko, it stood at $2.31 trillion at the time of writing, while Bitcoin's capitalization reached $1.2 trillion.
Bitcoin didn't reach such figures until November 2021, before its sharp drop from a high of $68,789. Bitcoin is about 10% away from its all-time high.
Wednesday's rise followed a number of positive developments in the market and a significant increase in interest from institutional investors.
The recent surge was driven not only by real demand but also by the cascading effect of short liquidations and a surge in speculative buying. Behind this, financing rates have risen sharply, reflecting the rise in long-term futures, which have traded at premiums of up to 16% over spot prices.
According to Coinglass data, stakes in Bitcoin futures to lower Bitcoin prices led to $25 million worth of liquidations since the morning hours in Asia, which may have helped drive prices higher. The liquidations show a slight bias toward short-term positions.
On a more positive note, exchange-traded funds (ETFs) saw significant inflows for the third day in a row, showing growing interest from institutional investors. Inflows into Bitcoin ETFs continue to break daily records. The giant BlackRock set a record for the day with a net inflow of $520 million.
It is also worth noting that BTC holders' confidence grew after MicroStrategy, led by Michael Saylor, purchased an additional 3,000 Bitcoins worth $155 million between February 15th and February 25th. MicroStrategy is the largest Bitcoin holder among all publicly traded companies.
On the upside, analysts have warned of the possibility of a sharp drop in price as short-term investors dump assets to secure profits. As evidence of this, the price of BTC recently experienced a minor correction at the $59,500 level, cooling the market's optimism, but it is believed that this level will soon be breached.
At the time of writing, Bitcoin was trading at $60,370.
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