The cryptocurrency market finds itself on the precipice of making history as a hot start to the week has Bitcoin's (BTC) price less than 2.5% from hitting a new all-time high – a feat that has never been achieved prior to a halving.
With the halving anticipated to occur around April 19, analysts have suggested a new ATH is all but assured, with Markus Thielen, Head of Research at 10x, saying that he anticipates a new high sometime this week.
While cryptos surged higher, stocks fell under pressure as investors adopted a more cautious approach to increasing their exposure to the markets ahead of this week's Congressional testimony from Federal Reserve Chair Jerome Powell and Friday’s nonfarm employment data.
At the closing bell, the S&P, Dow, and Nasdaq all finished in the red, down 0.12%, 0.25%, and 0.41%, respectively.
Data provided by TradingView shows that Bitcoin bulls have relentlessly pushed the price action since early on Sunday, breaking through resistance level after resistance level to hit a high near $68,000 on Monday afternoon, with no signs of halting their drive at the time of writing.
BTC/USD Chart by TradingView
Jim Wyckoff, Kitco’s senior technical analyst, noted “March bitcoin futures prices [were] higher again and hit another contract and multi-year high in early U.S. trading Monday.”
Dueling analysis: New ATH eminent vs. a much-needed correction
According to analysts at QCP Capital, surging demand in the derivatives markets suggests that activity will remain high until a new ATH is reached.
“Leveraged buyers will likely not relent until we break all-time highs, which could be any time now,” the analysts said. “This is a similar magnitude of leverage to what we saw in 2021, pushing the front-end of the curve higher and keeping the back-end elevated.”
But long-time bear il Capo of Crypto warned that a pullback is likely as the gains have been non-stop without a major correction.
“BTC is going higher than expected, and that's a reality. But this is not going to go ‘up only’ forever,” he said. “I prefer to wait until I see strong reasons to be exposed to the market for the long-term, and not just because the price is going up. That would be FOMO.”
Addressing those who say his bearish outlook has led to missed alpha, Capo said, “I'm not losing any money (because I haven't shorted alts for months and never shorted BTC, despite what people say), nor am I missing out on opportunities, because there are always opportunities. I'm just being cautious, waiting. Not following the masses and trying to be rational.”
“After a run from 16k to 60k without any major correction, which in my opinion has been caused mostly by ETF [demand], halving FOMO, stablecoin mints, and liquidity gaps formed during the bear market, everyone seems to be bullish and expecting ATH, 100k or even higher... ruling out any kind of major correction and just aiming higher and higher,” he said. “That's greed and euphoria.”
“Also, it seems like everyone caught the absolute bottom and rode the trend until now,” he added. “[For] those who really did, congratulations. But the majority just held during the entire bear market until now.”
According to John Glover, Chief Investment Officer at Ledn, “The euphoria surrounding the recent rally in BTC prices is very reminiscent of the last time we were trading at $65k.”
“While many people will point to the fact that the sell-off that ensued post-November 2021 (and previously after April 2021) was due to bad players in the market, I would argue that, while it may have been precipitated by the bad players, the sell-off was due to people being over-leveraged with unrealistic expectations for a straight-line appreciation to $100k+,” he said. “I believe that we are back in that same situation and we will see a correction back to the mid-to-low $40k area in the coming weeks.”
“Things always look bullish at the peak,” Glover added. “I was originally calling for this move higher when we were down in the low $30k, but I expected this to top out in the mid-to-high $50k region. This extension feels like a blow-off top to me.”
MN Trading founder Michaël van de Poppe also warned that the market may be topping and investors should be prepared for a notable correction.
#Bitcoin making a new yearly high, as we're approaching $65K.
I think we're close to peaking on the price action and are going to consolidate -> correction to lead later this month/beginning April.
Great movements, nonetheless. pic.twitter.com/I3IfnmkSLy— Michaël van de Poppe (@CryptoMichNL) March 4, 2024
But if Bitcoin does happen to hit a new ATH soon, it has the potential to skyrocket above $200,000 by June based on its historical performance following a new record high, according to Bitcoin Archive.
FUN FACT: The last time #Bitcoin broke the previous cycle's all-time high, the price more than tripled in just 103 days.
That would take the #Bitcoin price to $213,000 by June if this repeated. pic.twitter.com/oOmmTIkBAF— Bitcoin Archive (@BTC_Archive) March 4, 2024
Memecoin mania leads to double-digit gains
It was a breakout day for meme coins, with multiple projects recording double-digit gains, while the overall altcoin market traded mixed, with the top 200 tokens evenly split between winners and losers.
Daily cryptocurrency market performance. Source: Coin360
Bonk (BONK), Shiba Inu (SHIB) and Pepe (PEPE) led the meme coin charge with gains of 54.6%, 44.7%, and 35%, while eCash (XEC) climbed 44.4%, and Nervos Network (CKB) gained 30.4%. dogwifhat (WIF) led the losers with a decline of 9.3%, while Woo (WOO) fell 8%, and Metis (METIS) lost 7.9%.
The overall cryptocurrency market cap now stands at $2.5 trillion, and Bitcoin’s dominance rate is 53.3%.
