The cryptocurrency bull market was firing on all cylinders in trading on Tuesday as Bitcoin (BTC) surged above $57,000 for the first time in more than two years, a disheartening move for traders who had been hoping for a significant pullback as an opportunity to allocate fund into the top crypto.
While the rally continued for cryptos, stocks traded in a holding pattern, as investors continued to practice patience following last week’s run-up to new record highs for the S&P and Dow. Many are now awaiting Thursday's PCE index report, a key inflation input into the Federal Reserve's rate-setting decisions, before increasing their exposure to the market.
At the closing bell, the S&P and Nasdaq finished in the green, up 0.17% and 0.37%, respectively, while the Dow fell 0.25%.
Data provided by TradingView shows that Bitcoin bulls extended Monday’s rally in Tuesday trading, pushing BTC to a high of $57,660 in the afternoon, its highest price since December 3, 2021. At the time of writing, Bitcoin trades at $56,800, an increase of 4.1% on the 24-hour chart.
BTC/USD Chart by TradingView
“There are a range of factors influencing the market sentiment and surging cryptocurrency prices,” said Bakhrom Saydulloev, Product Lead at Mercuryo, in a note to Kitco Crypto. “To my mind, this recent rally can be largely attributed to the upcoming halving event and the anticipation surrounding it. These events have historically been associated with significant price jumps for Bitcoin, as the reduced supply leads to increased scarcity, driving up the demand.
Saydulloev said the halving “remains the core bullish factor for BTC, steering the entire crypto landscape, as various players anticipate its impact on Bitcoin's price trajectory in the coming months.”
“The S&P 500 hitting new all-time highs and the positive attitude of investors spilling over from the traditional markets is another factor,” he added.
As for how long the uptrend will last, Saydulloev said the impact of gold ETFs on the price of gold provides insight into the trajectory Bitcoin price could take.
“The launch of the first gold-backed exchange-traded funds in 2004 majorly accelerated the rise in gold prices, which continues even today, 20 years later,” he said. “In the same vein, Bitcoin's ongoing rally suggests a similar pattern may emerge in the cryptocurrency market.”
“Moreover, the anticipation surrounding the potential launch of a Bitcoin ETF has fueled optimism among investors, leading to increased demand and upward price momentum,” Saydulloev said. “If historical trends are any indication, these events could catalyze further growth in the Bitcoin price and lead to sustained year-on-year growth, akin to that of gold.”
According to veteran trader Peter Brandt, the recent surge above a key resistance level suggests that Bitcoin could top out at $200,000 as the bull market extends into late 2025.
Bitcoin Update
With the thrust above the upper boundary of the 15-month channel, the target for the current bull market cycle scheduled to end in Aug/Sep 2025 is being raised from $120,000 to $200,000. $BTC
A close below last week's low will nullify this interpretation pic.twitter.com/19ZXpAQW0v— Peter Brandt (@PeterLBrandt) February 27, 2024
Altcoin rotation underway
Tuesday saw crypto traders rotate out of recent high-flying altcoins and into tokens that show near-term promise, resulting in a mixed performance for the top 200 tokens, with the majority of projects recording gains.
Daily cryptocurrency market performance. Source: Coin360
Meme coins were the top performers, led by Pepe (PEPE), which increased by 50.6%, followed by a gain of 35.4% for FLOKI (FLOKI), and a 31.5% increase for dogwifhat (WIF). COTI (COTI) recorded the biggest loss, falling 17.3%, while Worldcoin (WLD) declined by 12.15%, and SingularityNET (AGIX) lost 10.7%.
The overall cryptocurrency market cap now stands at $1.05 trillion, and Bitcoin’s dominance rate is 38%.
