Bitcoin has once again made headlines as it reached a price level of $57,000 for the first time since late 2021. This significant milestone has sparked excitement and optimism among investors and cryptocurrency enthusiasts worldwide.
The surge in Bitcoin's price can be attributed to various factors, including increased institutional interest, growing adoption by mainstream companies, and a renewed interest in digital assets as a hedge against inflation. The recent approval of Bitcoin ETFs in several countries has also contributed to the bullish sentiment surrounding the cryptocurrency.
The flagship cryptocurrency was last higher by 5% at $54,460.00, according to Coin Metrics. At its session high, bitcoin hit $54,965.26 and reached its highest level since December 2021.
“Today is settlement day for bitcoin futures, which is contributing to the price jump we’re seeing,” said Ryan Rasmussen, analyst at Bitwise Asset Management. “We’re approaching the window where we typically see traders positioning themselves ahead of the bitcoin halving, which will happen in the second half of April. I suspect this is the day people start rolling into bullish positions pre-halving.”
Bitcoin has been on a tear at least since October 2023, according to technical analysts, when its 50-day moving average broke above its 200-day moving average. At the time, bitcoin was trading at $30,000. Thus, those using it as a signal would have been up over 80% since.
Meanwhile, some technical analysts see a pullback on the horizon.
“On-chain data and Bitcoin price charts indicate the possibility of Bitcoin price correction in the coming weeks,” wrote data company CryptoQuant in a blogpost Sunday. The firm’s analysts base their prediction on an indicator they call “short term Holder SOPR,” which is short for “spent output profit ratio,” a ratio that divides the current value of sold bitcoin by their value when they were acquired. “It looks like Bitcoin may drop to the $48,000 area,” CryptoQuant concluded.
Arbitrage involves profiting from price discrepancies between the two markets. An elevated funding rate means perpetuals are trading at a significant premium to the spot price. An arbitrageur, therefore, can short perpetual futures and buy the cryptocurrency in the spot market, pocketing the premium while bypassing the price volatility risks.
Shares of crypto-related companies gained in the US on Monday. MicroStrategy rose 16%, trading platform Coinbase Global Inc. increased 17% and miner Marathon Digital Holdings Inc. jumped 22%.
The positive sentiment spread to Asian stocks related to digital assets, including advances Tuesday in companies such as Japan’s Monex Group and Woori Technology Investment Co. in South Korea.
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