Bitcoin
and other cryptocurrencies marched upward Tuesday with the largest digital asset trading at its highest level in more than two years. Cryptos continue to benefit from multiple factors driving prices higher—and analysts say more gains could come.
The price of Bitcoin has risen 4% over the past 24 hours to just shy of $50,000, having previously traded near $50,400, the loftiest levels since December 2021 after a rally that has pushed prices more than 20% higher in two weeks. Bitcoin blew through the $49,000 level late Monday, which had stopped prices in January after the U.S. launch of spot Bitcoin exchange-traded funds (ETFs), a long-awaited catalyst that initially fizzled but has since proved to be a driver of gains.
“$50,000 is a big moment for Bitcoin and dispels the fear, uncertainty and doubt that’s gripped the space since the launch of spot ETFs sent the Bitcoin price as low as $38,500 and had investors questioning why these new products failed to live up to their billing,” said Antoni Trenchev, co-founder of crypto lender Nexo. “Bitcoin is now sitting at Camp 4 of Mount Everest with the peak—the all-time high of $69,000—tantalizingly close.”
Indeed, crypto bulls hope that spot Bitcoin ETFs will usher in a fresh wave of interest in digital assets—especially from institutional investors who have previously stayed on the sidelines. So far, these funds have seen steady inflows, which is a positive sign.
Jubilation in the stock market hasn’t hurt, either, since tokens have proved to be correlated with other risk-sensitive assets like equities. The
Dow Jones Industrial Average,
S&P 500,
and
Nasdaq
are all around record levels, with increased sentiment for risk among investors in stocks likely leaking into crypto markets.
Bitcoin has now more than recovered from the brutal bear market that began in spring 2022 and lasted through much of 2023, punctuated by the collapse of stablecoin Terra and the bankruptcy of crypto exchange FTX. However, prices for many other smaller tokens—while higher in the short term—remain at a fraction of their 2021 peaks.
Analysts are upbeat that more gains could come for crypto. For one, traders already anticipate Bitcoin’s so-called halving, which will cut the programmatic issuance of the token in half, putting pressure on supply and providing more tailwinds for prices. The halving is set for around April. More immediately, the momentum behind Bitcoin’s latest gains and other technical market indicators suggest that cryptos could keep climbing.
“The next target for Bitcoin will likely be $52,000 in the short term. The price may be ripe for some minor correction within a week or so, but its upward trend will likely continue due to improved demand through ETFs and technical sentiment,” said Yuya Hasegawa, an analyst at crypto exchange Bitbank.
“Looking to the medium term, be prepared for a move out of the $46,000 to $52,000 range to mark the start of an aggressive rally,” said Alex Kuptsikevich, an analyst at broker FxPro. “From a longer-term perspective, we are formally seeing the beginning of the Fibonacci pattern, the target of which looks to be the $63,700 area. This is close to historical highs.”
In focus from a technical perspective will be where Bitcoin closes out the week. Prices finished above $44,000 last week for the first time since March 2022, and the weekly close level has proved to be important in consolidating gains.
“A breakout on consecutive weekly closes above around $48,600 would be a bullish development, putting the next major hurdle at final resistance around $64,900, with an interim level near $56,400,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “Both short and intermediate-term momentum are positive and reaccelerating, and there are no signs of upside exhaustion, suggesting a confirmed breakout is likely.”
Beyond Bitcoin,
Ether
—the second-largest crypto—jumped 8% to $2,670. Smaller tokens or altcoins were also higher, with
Cardano
climbing 4% and
Polygon
popping 6%. Memecoins exhibited more of the same, with
Dogecoin
and
Shiba Inu
up 3% each.
Write to Jack Denton at jack.denton@barrons.com
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