Bitcoin, on February 12, achieved a significant milestone, surpassing the $50,000 mark for the first time in over two years. This feat, despite previous uncertainties surrounding the dominant cryptocurrency, signifies a remarkable resurgence.
Bitcoin Rally
Bitcoin’s journey to $50,000 marks a triumphant return from the setbacks of crypto scandals and a substantial 64% plunge in 2022. However, despite this achievement, bitcoin still lingers around $19,000 below its all-time high reached in November 2021.
Antoni Trenchev of Nexo notes that $50,000 became a significant milestone after the launch of spot ETFs last month. Despite initial skepticism and a subsequent selloff, positive sentiment has returned to the crypto market, with inflows surpassing outflows.
James Butterfill, CoinShares’ head of research, attributes these dynamics to China’s relaxed monetary policy and increased asset purchases, notably in bitcoin and equities. Robust demand for spot Bitcoin ETFs, with substantial net inflows, reflects growing confidence in the cryptocurrency.
On February 13, cryptocurrencies experienced a decline amid a broader market sell-off triggered by a higher-than-expected Consumer Price Index (CPI) reading. Bitcoin, being an aspirational store of value, is influenced by monetary policy, and the CPI report suggests a potential delay in the Federal Reserve’s pivot, impacting bitcoin’s perceived role as an inflation hedge.
Nico Cordeiro of Strix Leviathan anticipates a continued crypto rally but warns of potential weakness if inflation persists, contrary to the prevailing belief in bitcoin as an inflation hedge.
Perspectives on Bitcoin’s Future
Analyst Tuur Demeester predicts bitcoin reaching a minimum of $200,000 in the coming years, possibly exceeding $500,000 by 2026. Demeester emphasizes macroeconomic factors, foreseeing bitcoin’s growth fueled by trillions of dollars in global bailouts and stimulus.
Despite contrasting views, Demeester sees $50,000 as a crucial point, expecting retail interest to rise, stating, “there is no fever like bitcoin fever.”
While optimism surrounds bitcoin, some bearish voices, including trader il Capo of Crypto, warn of a potential market reversal.
However, Skybridge Capital founder Anthony Scaramucci remains optimistic, emphasizing that it’s not too late to buy bitcoin. Scaramucci cites falling interest rates, rising demand for spot Bitcoin ETFs, and the upcoming halving as factors supporting bitcoin’s upward trajectory.
Bitcoin Price Analysis
As of the time of writing, bitcoin (BTC) price stands at $51,751, reflecting a noteworthy 20% increase over the past seven days and contributing to a global cryptocurrency market cap of $2.02 trillion. With a circulating supply of 20 million BTC, bitcoin commands a market cap exceeding $1 trillion, reaching $1,015,756,688,898. The global cryptocurrency market cap has concurrently expanded, reaching a substantial $2.02 trillion, according to data on CoinGecko.
Analyzing the weekly timeframe, the Relative Strength Index (RSI) value is recorded at 86.9, signaling considerable bullish momentum. A weekly close above the $50,000 threshold could further strengthen this momentum, potentially propelling the price toward additional resistance levels.
Read also: Robert Kiyosaki: Bitcoin as a safe haven amidst economic decline
Looking ahead, the upcoming bitcoin halving event stands as a beacon of optimism among investors, potentially fueling further upside for Bitcoin. The historical impact of halving events on the cryptocurrency’s supply dynamics has been associated with bullish trends. However, amidst the excitement, a word of caution resonates for crypto traders. Interacting with the volatile crypto market demands a prudent approach to risk management. While the halving event may spark enthusiasm, it is crucial for traders to navigate these waters with a clear understanding of the inherent risks, emphasizing the importance of strategic risk management practices to safeguard investments in this dynamic and unpredictable financial landscape.
Ethereum eyes $3,000.
Ethereum, closely correlated with bitcoin, shows signs of a bullish upswing as speculative traders increase leveraged bets, indicated by on-chain market analytics platform, CryptoQuant
The surge in Ethereum’s funding rate, the highest in over 40 days, aligns with the rise in bullish positions ahead of the Bitcoin spot ETF verdict. The correlation between bitcoin’s milestone and Ethereum’s potential upswing raises optimism among traders.
Speculative traders anticipate Ethereum price to make another leg-up toward the $3,000 range. The funding rate rise and positive market sentiment support this projection. However, a significant resistance at $2,750 awaits, with 878,100 addresses holding 671,830 ETH at an average price of $2,760.
A successful breach of this resistance could propel Ethereum towards the $3,000 target. On the downside, a break below $2,000 seems unlikely in the short term, given the substantial support from holders who acquired 6.2 million ETH at an average price of $2,300.
Read more: How to Distinguish a Bull Run from a Bull Trap
Credit: Solomon Victor is a Technical Analyst who is also knowledgeable about various aspects of blockchain and cryptocurrency.
