Bitcoin soared past a crucial $30,000 level late Monday evening, reaching the highest level for the first time in 10 months and topping a key resistance zone.
The world’s largest cryptocurrency climbed over 6.5% over the last 24 hours to trade at around $30,200. The last time Bitcoin crossed the $30,000 level was June 6, 2022. Prior to breaking a key target level, Bitcoin was locked in a very tight trading range at about $28,000 for the past 3 weeks following the banking crisis meltdown.
Bitcoin last topped $30,000 on June 10 as it was on its way down to below $20,000, where it spent large parts of late 2022 and into the first weeks of 2023. Meanwhile, Ethereum advanced more than 1.5% to $1,922.06 as investors awaited the network’s latest planned tech upgrade, “Shapella”, scheduled to take place on Wednesday. Ethereum rose to $1,937.03 earlier Tuesday its highest level in a year. It’s expected to bring a wave of negative sell pressure on the crypto market due to previously locked funds of nearly $31 billion on the Ethereum network will be released over the course of the next few weeks.
Crypto-related stocks also climbed on the back of Bitcoin’s rise. Marathon Digital ($MARA), Coinbase ($COIN), and MicroStrategy ($MSTR) all rose more than 5% during Monday’s trading session and continued their run further during Tuesday’s premarket trading. Bitcoin miners including Riot Platforms (RIOT) and Hut 8 Mining (HUT) gained 13% and 10%, respectively.
Through April 4, the top 100 digital assets were nearly 50% in 2023, beating gold which is currently up 11%, S&P 500 up nearly 7%, treasury yield bonds currently up 4.1%, and crude oil which is lagging but still up over 1%, according to Bank of America analysts Alkesh Shah and Andrew Moss.
Trading volume, despite performing well continues to remain low, Matteo Bottacini, a trader at Crypto Finance AG notes. This indicates that a “few are taking profits from the year-end low and new buyers are still hesitant to enter the market.”
The at-the-money 7-day realized volatility for Bitcoin is currently trading at 36%, according to Bottacini’s technical analysis, indicating that buyers are paying a significant volatility premium as they are expecting bigger price movements.
According to CoinDesk, over 87% of all future trades that were liquidated in the past 24 hours were short, or bets against a rise in prices. Losses from these short trades amounted to a total of $145 million early Tuesday morning with Crypto exchange Huobi seeing over $45 million in liquidations on its platform, followed by counterparts Binance and OKX at $35 million each. Meanwhile, the largest single liquidation order happened on Huobi, a bitcoin/tether trade that value at $11 million.
Despite the low investor activity and trading volume in cryptos, investment in digital assets saw a turnaround late last month — breaking six consecutive weeks of outflows. In the week ending April 7th, digital asset investment products saw inflows totaling nearly $57 million, according to CoinShares’ weekly digital asset fund flows report. Most of the money inflows were solely focused on Bitcoin, accounting for $56 million of the total inflows and representing 98% of all inflows. This brought digital asset inflows back into positive territory for the year. The positive sentiment was primarily coming from the U.S., which saw almost half — $27 million of inflows.
Despite the skeptics and against all odds, Cryptocurrencies have been rallying this year. With Bitcoin now at the $30,000 level, the largest crypto is now up 82% this year after kicking off 2023 trading at almost $17,000. For the month of March, Bitcoin rose 23% and dominates the cryptocurrency market currently at a $582 billion market cap. In the last 24 hours, Bitcoin trading volume globally stood at $24.16 billion.
Many are perceiving Bitcoin as a risk-off asset and are underpinning the largest crypto comeback rally strength following the collapse of 3 U.S. banks that erupted in March. Since the evening of March 10, following the collapse of Silicon Valley Bank, the price of the world’s largest digital asset jumped 30% to around $26,000 as of March 14 when the Federal Reserve rushed to the aid of the tech-heavy financial lender. The banking crisis had fed into Bitcoin’s momentum and the revived view among crypto bulls that the world’s largest asset offers a more attractive and reliable shelter alternative compared to traditional finance that are currently questioning the stability of the current monetary system.
If Bitcoin passes the $31,200 level, it would erase all the losses from the deep market swoon the world’s largest crypto was dealt with from a tumultuous long Crypto winter that began with TerraUSD stablecoin winding last May. The TerraUSD collapse set the domino freefall in the demise of other largest crypto’s well-known notable exchanges to follow suit from 3AC to Celsius Network and the infamous FTX downfall in November 2022.
Investors will closely watch the latest reading on the consumer price index, due Wednesday, and the producer price index reporting on Thursday. The upcoming March inflation reports will be key in determining whether the Federal Reserve will continue forward with its rate-hiking campaign in the upcoming May FOMC meeting or pause. A pause in the Fed’s aggressive monetary tightening campaign is seen to bolster crypto assets and boost confidence to create a more stable environment.
However, the crypto asset still has a long way to go before it hits back to its November 2021 all-time highs of $69,000.
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