(Kitco News) – Cryptocurrencies were the bright spot in trading on Tuesday as Bitcoin (BTC) hit a new all-time high of $90,000 while stocks paused their record-setting rally and gold bounced off support at $2,600.
“BTC's recent breakout has the market in a state of euphoria and came within touching distance of $90,000,” said analysts at Secure Digital Markets. “BTC soared over 10%—the largest single-day dollar gain in its trading history. This surge pushed Bitcoin past silver, making it the eighth-largest asset globally by market cap.”
“Since the elections, Bitcoin has climbed over 26%, and the buzz is that it's not stopping until it hits that $100k milestone later this year,” they added. “The optimism is palpable, and it looks like this momentum could carry through the remainder of 2024.”
Bitcoin briefly retested support at $85,000 near midday but has since bounced back, with bulls now looking to push above $90,000 and extend the post-election rally.
BTC/USD Chart by TradingView
“Despite the pause, the sentiment remains bullish with smaller investors scooping up more BTC while the big fish, our beloved whales, have been taking some profits off the table,” Secure Digital Markets analysts said. “Amidst this frenzy, be aware that over the past 24 hours, liquidations hit the $1 billion mark, with trading volumes jumping 90%. A heads up to my fellow traders—keep an eye on those elevated funding rates as they hint at a possible short-term correction due to leverage plays.”
“On the ETF front, Bitcoin ETFs saw massive inflows of $1.11 billion, majorly driven by Blackrock amidst a flurry of $7.1 billion in trade,” they added. “Meanwhile, Ethereum recorded its highest-ever inflow at $295.5 million with big plays from Fidelity and Blackrock.”
At the time of writing, Bitcoin trades at $88,311, an increase of 0.40% on the 24-hour chart.
The other trending story in the crypto world is the rally by Dogecoin (DOGE), which hit a high of $0.44 in early trading and now sits at $0.382 for a gain of 17.2% on the 24-hour chart.
DOGE/USD Chart by TradingView
“Dogecoin has skyrocketed by 180% post-election, likely fueled by Elon Musk's antics and the general election drama,” Secure Digital markets analysts said. “Doge has been the standout, climbing to a $61 billion market cap, a hefty $45.2 billion jump in just a month and a half.”
At the close of markets, the S&P, Dow, and Nasdaq all finished lower, down 0.29%, 0.86%, and 0.09%, respectively.
And gold prices continued to consolidate following its year-long rally, last trading at $2,597.80/oz for a decline of 0.81% on the session.
Rally into 2025 expected
Donald Trump’s victory in last week’s election has been widely cited as the impetus for the current rally in cryptos, but according to Matt Bell, CEO of Turbofish, there are other factors involved.
“Bitcoin reaching all-time highs reflects a shift in the market’s response to policy uncertainty and a growing demand for decentralized assets,” he said in a note to Kitco Crypto. “This rally suggests that investors are increasingly viewing Bitcoin as a hedge against traditional macroeconomic and political risks, a trend that could further solidify its role as a digital store of value.”
“Looking ahead, we may see Bitcoin’s price action become more responsive to fiscal and regulatory shifts, reinforcing its standing not only as a speculative asset but as a financial safe haven in times of geopolitical change,” he added.
With the Republicans now in control of the White House and Congress, analysts widely agree that the near term will continue to be bullish for cryptos.
“The U.S. cryptocurrency sector is making history in the 2024 election cycle, investing over $238 million in political contributions—a figure that has outpaced traditional heavyweights like oil, pharmaceuticals, and even major Wall Street firms,” noted Shubh Varma, co-founder and CEO of Hyblock Capital. “This marks a significant milestone as digital assets emerge as a major financial force, not just in markets but now in political influence.”
“The election cycle's pro-crypto stance is already bearing results,” he added. “With over 290 pro-crypto candidates now in Congress, the political climate is shifting. As the House, Senate, and Executive lean Republican, the pathway to pro-crypto policy may be smoother than ever. Trump’s inner circle, which includes crypto advocates like JD Vance, Vivek Ramaswamy, and Lutnick, strengthens the sector's support in key political spheres.”
The post-election rally, dubbed the ‘Trump Trade,’ is evidence that political momentum is building, he said. “Market sentiment is further bolstered by the possibility of Bitcoin entering the U.S. strategic reserves. If this were to happen, it could trigger significant demand as central banks, traditionally the biggest buyers of gold, consider diversifying into BTC. Such a shift could open the floodgates for institutional investment on a global scale.”
“With a bull market underway, Bitcoin's potential upside is substantial,” Varma said. “One standout signal is the Fear & Greed Index, which has entered ‘extreme greed’ territory. However, despite the largest green candle in Bitcoins history, we only saw a move up of just +4 points from 76 to 80.”
“While this typically precedes consolidation or minor corrections in bull markets, a parallel can be drawn to November 2020, when the market sustained ‘extreme greed’ levels for a remarkable 76 consecutive days,” he noted. “By contrast, such levels generally last only a few days, making the current period one to watch for potential greed.”
“Another notable metric is the True Retail Long percentage, which is unusually low at 40%, placing it in the 20th percentile over the past 90 days,” he added. “In addition, Open Interest (OI), sits in the 99th percentile, suggesting that retail traders are primarily short, possibly providing fuel for further upward movement.”
“This dynamic echoes conditions from November 7, when True Retail Long percentage was even lower, in the 12th percentile, with OI similarly high,” Varma said. “Historically, low retail long positioning amid high OI has often led to sharp upward moves as short positions get squeezed out.”
In the derivatives market, Varma noted that “Leverage data reveals that top traders continue to favor long positions, with the leverage delta between average longs and shorts again exceeding +10—a strong bullish indicator.”
“Typically, this leverage pattern is seen after price declines, but this time, it’s emerging following a substantial price increase,” he said. “This deviation could indicate sustained bullish momentum if long leverage continues to build in the wake of BTC’s recent surge.”
With Bitcoin now in consolidation above $86,000, Varma said traders should focus on “two key strategies for navigating this bull market.”
First, he recommended using pullbacks as buying opportunities, saying, “Given the strength of this rally, buying dips could offer favorable entry points.
Second, he said to “Monitor metrics for local top signals. Keep an eye on metrics like retail long positioning and leverage imbalances that may signal temporary peaks.”
“With BTC’s bull run gaining momentum, these insights will be crucial for positioning amid evolving market conditions,” Varma concluded. “We’ll continue to analyze these shifts and monitor any indicators that suggest potential for further upside.”
Profit-taking hits altcoins
Altcoins were a mixed bag on Tuesday, with roughly a third of the tokens in the top 200 recording gains while the rest saw losses.
Daily cryptocurrency market performance. Source: Coin360
Bonk (BONK) was the biggest gainer, increasing 27.7%, while AIOZ Network (AIOZ) climbed 23.2% and Akash Network gained 18.8%. EigenLayer (EIGEN) was the biggest loser, falling 12.8%, followed by declines of 11.6% and 11.5% for DOGS (DOGS) and Artificial Super Alliance (FET), respectively.
The overall cryptocurrency market cap now stands at $2.98 trillion, and Bitcoin’s dominance rate is 59.5%.
