Analyst: This round of Bitcoin price increase is driven by position resets and reduced supply elasticity

BTC-2,44%

BlockBeats reports that on March 4th, according to Decrypt, Bitcoin’s rebound trend continues, breaking above $71,000 for the first time in three weeks. However, whether this rally can sustain depends on the overall liquidity environment and geopolitical risks.

Altura co-founder and CEO Ranveer Arora said, “ETF capital inflows continue to provide structural buying support, but the more direct drivers seem to be position resets, reduced supply elasticity after the halving, and improved liquidity expectations. In the crypto market, once selling pressure is absorbed and positions start to rotate, leverage and derivatives capital flows often accelerate the price discovery process.” Arora believes that Bitcoin’s movement remains closely related to the global liquidity environment. He pointed out that Bitcoin’s performance “is more like a high-beta expression of the global liquidity situation than a traditional defensive asset.”

LetsExchange Chief Product Officer Alex J. stated that Bitcoin reaching $71,000 was “mainly driven by escalating geopolitical tensions and rising uncertainty.” When asked whether this rebound can continue, Alex J. said, “Probably not. But the price is also unlikely to fall sharply.” He explained that when the global financial system experiences severe turbulence that significantly impacts liquidity flows between different assets, Bitcoin struggles to compete with conservative assets like gold.

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