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Bitcoin has resumed its upward trajectory, crossing a critical resistance level at $97,000 to reach its highest price since February. As of Saturday, Bitcoin was trading at approximately $96,500, reflecting a 30% increase from its April lows. This article highlights three key reasons why Bitcoin could potentially surge to a new all-time high this year.

Bitcoin Supply on Exchanges Is Declining

One of the primary factors driving Bitcoin’s bullish momentum is the significant reduction in its supply on centralized exchanges. The total supply of Bitcoin on exchanges has dropped to 1.42 million coins, marking its lowest level in over six years. For context, this figure stood at 3.21 million during its peak in 2018.

Conversely, the supply of Bitcoin held outside of exchanges has risen to 18.43 million coins. This trend indicates that investors are increasingly opting to hold their coins rather than sell, potentially leading to a supply squeeze as demand continues to grow.

Notably, major Bitcoin holders have shown little intention of selling. Michael Saylor’s firm, which owns over 2% of the total Bitcoin supply, continues to accumulate. Similarly, leading companies such as Tesla, Coinbase, Galaxy Digital, and Block have not made any indications of reducing their Bitcoin holdings.

Increased Retail and Institutional Demand

Another critical driver of Bitcoin’s price surge is the increasing demand from both retail and institutional investors. Exchange-Traded Funds (ETFs) have played a pivotal role in this trend, showcasing strong inflows since their inception last year. According to recent data, Bitcoin ETFs have experienced outflows in only four months, reflecting sustained investor interest.

Bitcoin-focused ETFs have collectively amassed over $40 billion in assets. BlackRock’s IBIT leads the pack with $60 billion, followed by Fidelity’s FBTC and Ark Invest’s ARKB, holding $20 billion and $19 billion, respectively. This consistent inflow into ETFs underscores growing institutional demand, particularly in the U.S.

Additionally, there is speculation that demand for Bitcoin may rise globally as countries seek to diversify away from the U.S. dollar. These supply-demand dynamics are fueling optimism among analysts, with some projecting significant price increases in the coming years.

For example, Standard Chartered analysts predict Bitcoin may reach $200,000, while Ark Invest forecasts a staggering $2.4 million valuation by 2030.

Technical Indicators Signal Further Upside

Bitcoin’s technical analysis also points to the potential for further price gains. The cryptocurrency has maintained its position above a long-term ascending trendline, which has been in place since August 5 of last year. Additionally, Bitcoin recently broke through a crucial resistance level at $88,690, which formed the neckline of a double-bottom pattern.

Furthermore, Bitcoin is trading above its 50-day and 100-day Exponential Moving Averages (EMAs), indicating strong upward momentum. Analysts believe this technical strength could propel Bitcoin above the $100,000 milestone, with the possibility of revisiting its all-time high in the near future.

As Bitcoin continues to capture the attention of both retail and institutional investors, these combined factors of reduced supply, rising demand, and strong technical indicators suggest a promising outlook for the cryptocurrency market.

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