The price of bitcoin has surged to start the week, inching even closer to its all-time high after a brief pause over the weekend. The flagship cryptocurrency was last seen trading 5% higher at $66,288.70, according to Coin Metrics. It peaked at $66,479.70, marking its highest level since November 2021. Ether also saw a gain of 1.5%, reaching $3,525.21. Both coins are coming off their best week in nearly a year, with bitcoin gaining about 21% and ether 16%.

The market for cryptocurrencies witnessed a pause over the weekend as it digested two days of significant outflows from the Grayscale Bitcoin ETF, offset by inflows into new bitcoin ETFs. Antoni Trenchev, co-founder of crypto exchange Nexo, pointed out that the recent surge in bitcoin prices tends to take place during the normal trading week rather than on weekends due to the emergence of new spot ETFs. He suggested that the market might be gearing up for another explosive price action similar to what happened early last week when bitcoin surged by $10,000 in just a couple of days.

Investors have been eagerly awaiting for bitcoin to approach its all-time high. At $66,000, it is just 4% shy of its November 2021 intraday record of $68,982.20. While some analysts believe that bitcoin could continue to rise in the short term, there are concerns that it may cool off in the coming weeks as unrealized profit margins reach extreme levels. Despite this, long-term investors remain confident that the combination of increasing demand from new U.S. exchange-traded funds and a tightening supply following the April halving event will propel bitcoin to new highs.

Bitcoin has also been receiving a boost from the stock market, with the tech-heavy Nasdaq Composite reaching an all-time high recently. David Duong, head of institutional research at Coinbase, anticipates that March could be a month of sideways trading for bitcoin. However, he believes that the cryptocurrency is benefitting from an AI- and blockchain technology-driven productivity surge that is likely to persist. The positive momentum in bitcoin has also lifted other cryptocurrencies, particularly meme coins like Dogecoin and Shiba Inu, which have seen significant gains.

The rally in bitcoin has also had a positive effect on crypto equities, with companies like Coinbase and Microstrategy seeing gains of 6% and 18%, respectively. In the mining sector, companies like CleanSpark, Marathon Digital, and Riot Platforms have also witnessed an uptick in their stock prices, reflecting the overall positive sentiment in the crypto market. Analysts believe that the performance of these companies, along with the resurgence of retail investors in the market, bodes well for the future growth of cryptocurrencies.

Investing

Articles You May Like

The Efficacy of China’s Fiscal Stimulus Strategy
Strategies for Minimizing Costs When Buying a Newly Built Home
The Federal Reserve’s Current Stance on Inflation and Interest Rates
Debunking the Myths of Tax Relief for Middle-Class Americans

Leave a Reply

Your email address will not be published. Required fields are marked *