28 February 2024
After rising 5% in the last day, Bitcoin (BTC) is now rapidly nearing the coveted $60,000 mark. This is because investor interest in the largest cryptocurrency in the world has reached levels last seen during a 2021 boom, bringing it very close to its all-time high.
Pre-Halving Rally? Bitcoin Nears $60K
The increase in price coincided with a surge in demand as spot bitcoin exchange-traded funds (ETFs) achieved trading volumes of over $3 billion cumulatively on Tuesday. Additionally, other traders cited the anticipated April bitcoin halving as the source of a fresh narrative that spurs a pre-halving increase.
The world’s most sought-after digital asset’s market cap has now reached $1.2 trillion, Coingecko data shows.
Joel Kruger, a market strategist at LMAX Group, stated that the market is “that much more determined to see the level retested and shattered” now that bitcoin is that much closer to retesting its record high.
Due mostly to the euphoria surrounding a number of spot bitcoin exchange-traded funds that began trading in January, bitcoin has increased by as much as 16% this week and 35% so far this year.
Bitcoin reached its highest level since November 2021 when it surpassed $59,000. The objective of the present surge is to see if the price can rise to $68,790, its all-time high. Six months before a stunning crash in 2022, that peak occurred.
According to Coinglass data, futures bets on lower bitcoin prices have taken on $25 million in liquidations since Asian morning hours, which could have contributed to the price rise.
‘Extreme Greed’ For BTC
In the meantime, on Wednesday, the Fear and Greed Index—a sentiment indicator that measures how quickly asset movement deviates from underlying fundamentals—flashed 82, signaling “extreme greed” and hitting its highest level in more than a year.
A scale of 0 to 100 represents the most anxious and 100 is the most greedy on the index. According to the index’s creators, an environment that is hungry is indicative of exuberance and shows the market is due for a correction.
Since the ETFs started trading on January 11, Bitcoin has increased by 24%. The current upward trend in pricing, according to Bitwise Asset Management analyst Ryan Rasmussen, is merely the beginning.
“The demand that ETFs are generating for the spot bitcoin market is substantially greater than the daily production of fresh supply,” he stated.
In the end, Rasmussen stated:
“What we’re witnessing is cryptocurrency kind of rising from the ashes of the 2022 market.”
The volume of bitcoin trades made thus far this quarter has exceeded the totals for each quarter of 2023 for the same period. Major cryptocurrency trading platforms like Coinbase Global (COIN) and Robinhood (HOOD) have benefited greatly from this activity. Between the start of January and now, those stocks have increased by 27% and 31%, respectively.
Featured image from Pexels, chart from TradingView