3 Reasons Bitcoin Has Rallied Over 60% in Just Two Months

Bitcoin has chalked up a stellar price rally in the past two months, reaching 33-month highs close to $16,000.

That's a 63% price gain in eight weeks, according to CoinDesk's Bitcoin Price Index.

Over 2018 and 2019, bitcoin often languished below $10,000, struggling to recover from a crash that followed the late 2017 surge to record highs near $20,000.

On Sept. 15, listed business intelligence firm MicroStrategy announced the purchase of $250 million worth of bitcoins, and three weeks later payments company Square also disclosed its investment in the bitcoin market.

In October, leverage in the derivatives market was also skewed bullish, with institutions holding record long positions in bitcoin futures listed on the Chicago Mercantile Exchange.

The number of bitcoin whale entities - clusters of addresses held by a single network participant holding at least 1,000 BTC - rose to four-year highs at the end of October.

Large spot buyers, mostly institutions, have created a shortfall in bitcoin liquidity, pressuring prices to the higher side.

"Between Grayscale's GBTC trust, MicroStrategy and the influx of other large spot buyers, the supply of bitcoin is beginning to look more scarce," Dibb said.

The total number of bitcoins held on cryptocurrency exchanges has fallen 9% to 2,404,788 BTC in the past two months, according to Glassnode data.

Bitcoin ended the third week of October above the key hurdle and remained bid in the following two weeks.