Bitcoin has hit a new all-time high (ATH) of $69,300 , almost two and a half years after the peak of the last bull market.

It’s been a long journey since November 2021, when Bitcoin ( BTC ) lost momentum, shifting from a full-on bull market into a prolonged crypto winter.

Bitcoin price on March 5. Source: Coinbase

Crypto traders had to wait until the beginning of 2023 for signs of hope. Since then, the price of BTC has climbed steadily, entering a new price discovery phase.

What to expect in the Bitcoin price discovery phase?

Investors and traders tend to check the historical data of any given asset to guide them in a trade. Once a new ATH is breached, the asset enters a new phase where nobody knows what will follow. There are no resistance or support levels to guide a trader.

Cointelegraph asked veteran crypto investor and Bitcoin educator Chris Dunn what the market should expect as Bitcoin enters price discovery. In the short term, Dunn expects a domino effect that will push the price of Bitcoin to reach even higher highs:

“I expect the trend to accelerate through the all-time high break as people buy breakouts, shorts get liquidated, and potential sellers pull their asks off the order books.”

Bitcoin has climbed steadily in the past year. However, since Feb. 16, the price of Bitcoin has turned into mega green candles, raising the price of BTC by 25%.

Many traders expected a pullback, but on Feb. 27, Bitcoin surprised the market with another giant green candle, raising the price of Bitcoin again by 25%, breaching the $60,000 level.

These green candles caught many Bitcoin short traders off-guard.

According to data from crypto data platform CoinGlass, on Feb. 27, $161 million in BTC shorts were liquidated in only 24 hours.

The total damage reached $268 million as short positions were liquidated when Bitcoin briefly touched $57,000. Since then, Bitcoin’s price hasn’t taken a break and finally surged over the $69,000 leve.

When shorts are liquidated, the traders who had bet on the price of Bitcoin falling (by borrowing and selling Bitcoin at a high price to repurchase it at a lower price) are forced to cover their positions by buying back the Bitcoin they sold, often at a higher price. This sudden surge in buying pressure can lead to a rapid increase in the price of Bitcoin.

Short liquidations can trigger a cascade effect known as a short squeeze, where short sellers rush to buy back Bitcoin to cover their positions, driving the price of BTC even higher. This phenomenon can exacerbate price movements and lead to significant volatility in the Bitcoin market.

The ETF effect on the rapid Bitcoin price increase

Since the United States Securities and Exchange Commission gave the green light to spot Bitcoin exchange-traded funds (ETFs) in the United States, inflows into these new financial products haven’t stopped.

As of March 1, BlackRock’s iShares Bitcoin Trust crossed $10 billion in assets under management in just over seven weeks. The BlackRock ETF is only 1 of the 11 active spot Bitcoin ETFs in the U.S. market.

This contrasts with the first U.S. gold-backed ETF, which took two years to reach the $10 billion mark after launching in 2004, according to the Zero Hedge finance blog.

Market analyst and Reflexivity Research co-founder Will Clemente commented on how the “Bitcoin ETF inflows have absolutely blown gold’s out of the water.”

Source: @ClementeIII/X

Dunn has witnessed several bull markets and halvings. In his opinion, this new bull market should not ignore the significant role of the Bitcoin ETFs as an entry point for Wall Street and institutional investors:

“I think the ETF inflows were a wake-up call to the world about the true demand from Wall Street and investors who have pent-up demand for Bitcoin in accounts where they can buy spot ETFs.”

The injection of capital into the spot Bitcoin ETFs shows no signs of stopping. On March 4, U.S.-based spot Bitcoin ETFs saw net inflows of $562 million. The inflow of money marked the third-largest day of inflows to spot Bitcoin ETFs since they started trading on Jan. 11.

The increased demand for Bitcoin from the spot ETFs means more BTC being purchased from the open market, driving the price higher.

This is a developing story, and further information will be added as it becomes available.