Bitcoin Surges Back to $70,000 on Fed Easing Hints and Exhausted Selling Pressure

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Bitcoin’s bullish momentum remains intact as the leading cryptocurrency reclaims the $70,000 mark following a brief correction. After briefly dipping below $61,000 last week, BTC rallied over 7% to reach $71,239.31 by the close of U.S. markets on March 25—demonstrating resilience and reinforcing confidence in the ongoing bull cycle.

This rebound comes after Bitcoin hit a record high of $73,797.68 on March 14. The subsequent pullback was consistent with historical patterns seen during strong bull markets, where short-term corrections allow for healthier, more sustainable upward movement.

Market Correction: A Sign of Strength, Not Weakness

Alex Thorn, Head of Research at Galaxy Digital, emphasized that last week’s dip aligns with typical Bitcoin price behavior during mature bull phases. He noted that while the exact catalyst for the March 25 surge isn’t clear, the broader trend—new highs followed by healthy retracements—remains unchanged.

Thorn also highlighted signs of exhausted selling pressure across key technical indicators. After weeks of outflows from spot Bitcoin ETFs, particularly from the Grayscale Bitcoin Trust (GBTC), selling momentum appears to be slowing. GBTC experienced record fund outflows in recent weeks, largely driven by the bankruptcy and liquidation processes of crypto firms like Genesis Global Trading and Gemini Trust Company.

However, these downward pressures may have peaked. With many weak hands already shaken out, the market is now better positioned for renewed upside as institutional and retail demand continues to build.

👉 Discover how macro trends are shaping the next leg of the Bitcoin rally.

Fed Policy Shift Fuels Risk Appetite

One major factor supporting Bitcoin’s resurgence is the growing expectation of a dovish shift in U.S. monetary policy. The Federal Reserve signaled last week that it may begin cutting interest rates in 2024 and will slow its balance sheet reduction program—moves that could significantly improve market liquidity.

Sam Callahan, Chief Analyst at Swan Bitcoin, explained that Bitcoin acts as a real-time barometer for liquidity conditions. “When the Fed hints at looser monetary policy, risk assets respond quickly,” he said. “Bitcoin is not just reacting—it’s leading.”

Easier monetary conditions tend to encourage investors to move capital into higher-risk, higher-return assets. As inflation stabilizes and rate cuts loom, Bitcoin’s fixed supply and decentralized nature make it an increasingly attractive hedge against currency devaluation and long-term inflation.

Institutional Demand Intensifies

The launch of spot Bitcoin ETFs has fundamentally altered the supply-demand equation. Wall Street giants like BlackRock and Fidelity now directly own Bitcoin through their ETFs, competing with other institutional players for a limited pool of available coins.

According to a CoinDesk report from February, just one month after approval, 11 spot ETF issuers collectively held 192,000 BTC. Beyond these new entrants, established holders like Grayscale (420,000 BTC) and MicroStrategy (nearly 200,000 BTC) continue to accumulate aggressively.

This surge in institutional demand coincides with an impending Bitcoin halving event, expected in April 2024. Every four years, the block reward for miners is cut in half—this time reducing from 6.25 to 3.125 BTC per block. Historically, such events have preceded massive price rallies due to reduced new supply entering the market.

Data from previous cycles supports this pattern:

With both structural demand growth and tightening supply dynamics at play, many analysts believe the stage is set for another powerful uptrend.

👉 See how supply constraints are fueling Bitcoin’s long-term value proposition.

Supply Crunch Looms as Miners Face Reduced Output

Michael Saylor, founder of MicroStrategy—one of the largest corporate Bitcoin holders—previously pointed out a critical imbalance: Bitcoin miners can currently sell only about 900 BTC per day. After the halving, that number will drop to approximately 450 BTC per day.

Given the rising daily demand from ETFs and other institutional buyers, even modest buying pressure could quickly outpace available supply. When demand consistently exceeds daily miner issuance, upward price pressure becomes almost inevitable.

This dynamic creates what some call a “sell-side vacuum”—a situation where there simply aren’t enough coins available for sale at current price levels. As ETF inflows continue and investor appetite grows, this imbalance could accelerate price discovery to new all-time highs.

Market Sentiment and Sector-Wide Gains

The renewed optimism isn’t limited to Bitcoin alone. The broader crypto sector saw strong gains on March 25:

These movements reflect growing confidence that regulatory clarity, financial innovation, and macro tailwinds are aligning to support sustained growth across digital assets.

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Frequently Asked Questions (FAQ)

Q: Why did Bitcoin drop below $61,000 last week?
A: The dip was part of a normal market correction following a record high. Increased outflows from GBTC and broader profit-taking contributed to short-term downward pressure.

Q: How does the Federal Reserve impact Bitcoin’s price?
A: Easing monetary policy—like rate cuts or slowing quantitative tightening—increases market liquidity. This often boosts investor appetite for risk assets like Bitcoin.

Q: What happens during a Bitcoin halving?
A: Every four years, the number of new Bitcoins awarded to miners is cut in half. This reduces the rate of new supply entering circulation, historically leading to price increases over time.

Q: Are spot Bitcoin ETFs affecting the market?
A: Yes. ETFs issued by firms like BlackRock and Fidelity are purchasing large amounts of Bitcoin, increasing institutional demand and competing with existing holders for limited supply.

Q: Could Bitcoin reach $100,000 after the halving?
A: While no price prediction is guaranteed, historical patterns suggest significant post-halving rallies. Combined with strong ETF demand and macro tailwinds, a move toward $100,000 is within plausible range.

Q: Is now a good time to invest in Bitcoin?
A: Timing the market is risky. However, with structural support from institutional adoption, limited supply growth, and favorable macro conditions emerging, many experts view this as a strategically strong phase in the cycle.

👉 Stay ahead of the next market move with real-time data and insights.