Bitcoin surged past $51,000 in a widespread cryptocurrency upswing, with Ether also reclaiming its position from nearly two years ago before the collapse of the TerraUSD stablecoin.
Bitcoin’s impressive 21% increase since the beginning of the year pushed its market cap over $1 trillion, a milestone not seen since December 2021, according to CoinGecko. Ether saw a 4.1% rise by mid-morning in London on Wednesday, with other altcoins like Avalanche, Polkadot, and Polygon following suit.
Despite higher-than-expected US inflation figures reported on Tuesday, the digital asset market continued its recovery journey, which started over a year ago and gained momentum following the Securities and Exchange Commission’s approval of Bitcoin ETFs. However, some analysts warn that technical indicators suggest the rally may face temporary setbacks.
“Bitcoin has shown remarkable resilience despite the recent decline in risk sentiment,” noted Tony Sycamore, a market analyst at IG Australia Pty, adding that technical analysis hints at a potential dip to the high $30,000 range.
Various sector-specific factors are bolstering Bitcoin’s performance, including the launch of dedicated US exchange-traded funds for the token. These products, introduced by firms like BlackRock Inc. and Fidelity Investments, have attracted a total of $3.3 billion in net inflows since their debut on January 11th.
Moreover, the upcoming Bitcoin halving scheduled for April is expected to reduce the supply of the largest digital asset, a trend historically associated with price support.
“We anticipate a brief pause in the market’s momentum after an impressive four-month rally, before attention shifts to the upcoming Bitcoin halving,” commented Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets.
Bitcoin’s remarkable resurgence since the beginning of last year has caught the attention of traders, with options market activity indicating bullish sentiment targeting prices beyond the previous record of nearly $69,000 reached in November 2021.
