Market Wrap: Bitcoin Rallies On After Passing $50K Psychological Stage to $52K

Bitcoin broke above $52,000 Wednesday, with a market capitalization nearing $1 trillion.

Bitcoin is in “uncharted territory,” mentioned Hunain Naseer, senior editor at OKEx Insights, after its value surged to a brand new all-time excessive above $52,000, solely a day after it handed the important thing psychological threshold of $50,000.

Value volatility stays excessive compared with main macro property together with the Commonplace & Poor’s 500 Index of shares, gold and bonds.

“We are able to count on some consolidation between $50,000 and $52,000, with a potential retest of the $49,000 assist,” Naseer added.

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One bullish sign: a considerable amount of stablecoin reserves on cryptocurrency exchanges, in response to knowledge from South Korea-based crypto knowledge agency CryptoQuant. That might present merchants transferring stablecoins into place to allow them to purchase shortly if the worth is correct.

“So many stablecoins in exchanges” in contrast with bitcoin held on exchanges, Ki Younger Ju, CEO of CryptoQuant, instructed CoinDesk, stating that promoting strain is comparatively low.

Within the derivatives market, bitcoin futures on the Chicago-based CME logged a report excessive single-day buying and selling quantity and complete curiosity on Tuesday, in response to data from blockchain analytics site Skew. The elevated exercise might be an indicator of rising bitcoin demand from institutional buyers.

Institutional curiosity in bitcoin can be mirrored in one other market indicator known as the Coinbase premium, a measurement of the worth distinction between Coinbase Professional’s BTC/USD pair and Binance’s BTC/USDT pair, mentioned CryptoQuant’s Ki. The quantity flipped optimistic on Wednesday.

“Coinbase [U.S. dollar] whales are like gatekeepers” of the bull market, Ki mentioned of buyers with giant holdings.

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Wednesday, buying and selling round $1,828.15 and climbing 4.45% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

On the technical aspect, ether is in a consolidation section after shedding short-term momentum, in response to Katie Stockton, a technical analyst for Fairlead Methods.

“I view the consolidation as wholesome inside the context of its steep uptrend,” Stockton mentioned. “The 20-day transferring common at $1,556 is a gauge of preliminary assist.”

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Ether’s correlation with bitcoin has been flat this month at round 0.68, after it moved all the way down to as little as 0.55 in January.

“So long as bitcoin stays above $49,000 we are able to count on a rally within the altcoins, together with ether,” OKEx Insights’ Naseer mentioned. “However that may solely occur when bitcoin’s volatility drops a bit.”

On the similar time, institutional curiosity in ether futures has grown considerably, in response to knowledge supplied by blockchain analytics agency Glassnode.

“One week after ether futures launched on CME, day by day buying and selling quantity reached a complete of $75.8 million yesterday – nearly doubling Friday’s quantity of $40 million,” Glassnode wrote in a tweet Wednesday. “In the meantime, open curiosity has elevated to $62 million.”

The launch of the CME’s new ether futures contract final week is perhaps one purpose why ether’s value has underperformed, mentioned dealer and analyst Alex Kruger.

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“Ether is a excessive beta asset to bitcoin, and it’s supposed to maneuver in line,” Kruger mentioned. “Generally its personal set of technical and or basic drivers kick in and make value trajectories or efficiency variations.”

Digital property on the CoinDesk 20 are principally in inexperienced Wednesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):