Continuing its winning streak on Thursday, Bitcoin in February 2024 posted its biggest monthly gain in more than three years and it is within range of a record high as cash rushing to listed bitcoin funds propels a sweeping rally. The largest cryptocurrency by market capitalisation touched as high as $63,933 overnight with a monthly gain of more than 44 per cent, which is the largest since December 2020.
The largest cryptocurrency by market capitalisation was steady in Asia morning trade at $61,100, having changed hands at as high as $63,933 overnight. Its monthly gain is more than 44 per cent, the largest since December 2020. It is pulling the smaller ether along for the ride — it last bought $3,416, up 50 per cent in February.
CoinSwitch Markets Desk in its statement said, “In the last 24 hours, unprecedented volumes were seen in Bitcoin spot ETFs with a total of $7.5 billion being traded, doubling the previous record as BTC hit an all-time high in the Indian markets. Bitcoin is now up by more than 44 per cent in February, which is the highest monthly move since December 2020.”
It said the Indian investors who had previously invested in Bitcoin are now in a profitable position with the market sentiment slowly moving towards the ‘extreme greed’ category. A glimpse of what might happen if you are too late was visible yesterday. After BTC reached $64k, there was a sudden dip due to sudden profit booking and BTC’s price fell below $59k within minutes, causing close to $200 million worth of liquidations within just one hour. Simultaneously, the world’s largest fiat-based exchange Coinbase went down for a bit.
“It is worthwhile to note that Bitcoin has never crossed all-time highs in the halving event. The $69k all-time high would act as a major resistance. However, in yesterday’s crypto market cycle, we also saw a glimpse of what altcoins can also do in such scenarios, as major memecoin DOGE pumped 20% in just 1 hour,” CoinSwitch stated.
The momentum suggested “a test and likely break” of $69,000, said Tony Sycamore, an analyst at brokerage IG Markets, which would put bitcoin beyond its record high set in the heady days of crypto peaks in November 2021.
The head of Coinbase Global said the exchange was dealing with a surge in traffic.
“If this were any other market, it would likely be in the ‘blow-off top – don’t go near that bubble’ category,” said Matt Simpson, senior market analyst at City Index.
“But bitcoin is back in its parabolic-rally phase, with no immediate signs of a top.”
The approval and launch of spot bitcoin exchange-traded funds in the U.S. this year has opened the asset class to new investors and reignited the excitement that was sapped when prices collapsed in the “crypto winter” of 2022.
LSEG data showed flows into the 10 largest spot bitcoin ETFs brought in $420 million on Tuesday alone, the most in almost two weeks. The three most popular, run by Grayscale, Fidelity and BlackRock, saw volumes surge.
Traders have also poured into bitcoin ahead of April’s halving event – process that takes place every four years in which the rate at which tokens are released is cut in half, along with the rewards given to miners.
Supply of bitcoin is limited to 21 million, of which 19 million have already been mined.
In addition, the prospect of the Federal Reserve delivering a series of rate cuts this year has fed investor appetite for higher-yielding or more volatile assets. Foreign exchange volatility has slumped to two-year lows and the U.S. equity volatility index is settling back to pre-pandemic ranges.
(With Inputs From Agencies)
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