Bitcoin surpassed $51,000 in a broad cryptocurrency rally that saw Ether, the second-largest token, return to where it was when the TerraUSD stablecoin crashed nearly two years earlier.
According to CoinGecko data, Bitcoin’s market valuation has risen by 21% year so far, surpassing $1 trillion for the first time since December 2021. Ether was up 4.1% as of 11:11 a.m. in London on Wednesday, while altcoins like Avalanche, Polkadot, and Polygon all increased.
A higher-than-expected US inflation reading on Tuesday was insufficient to derail the digital-asset rally, which began a little more than a year ago and gathered traction in recent months with the Securities and Exchange Commission’s approval of Bitcoin ETFs. Nonetheless, other analysts warn that technical clues indicate that the rise may run out of steam, but only temporarily.
The digital currency showed “impressive resilience despite the overnight deterioration in risk sentiment,” Tony
Bitcoin had “impressive resilience despite the overnight deterioration in risk sentiment,” according to Tony Sycamore, a market analyst at IG Australia Pty. At the same time, a separate technical analysis based on chart patterns suggests a transitory plunge into the high $30,000s, he said.
Sector-specific reasons have been supportive of Bitcoin, notably the launch of US exchange-traded funds dedicated to the token. Since Jan. 11, the batch of products from BlackRock Inc. and Fidelity Investments has garnered a net $3.3 billion in trading volume.
Meanwhile, the so-called Bitcoin halving, which is expected to take place in April, would reduce the supply of the largest digital asset, a scenario that many see as a price prop based on history.
“We expect the market to take a short pause here after a spectacular four-month-long rally before the upcoming Bitcoin halving takes over the narrative,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.
Bitcoin has tripled since the beginning of last year, marking a return from the 2022 digital-asset collapse. Wagers in the options market show that traders are looking to break the record of nearly $69,000 set in November 2021.