Bitcoin has breached $57,000, causing a buying frenzy among cryptocurrency traders.
So what’s stopping you from getting on the Bitcoin train?
In this article, CMTrading examines the surge in Bitcoin, the pros and cons affecting the crypto market, and shares valuable advice for all traders.
Bitcoin trading: Cryptocurrency on the rise
Bitcoin reached a two-year high on February 26, with huge investors buying the cryptocurrency, while smaller rival ether surpassed $3,200 for the first time since 2022.
Bitcoin has risen by more than 10% in two sessions, boosted by a Monday statement from crypto investor and software business MicroStrategy (MSTR.O) that it had just purchased approximately 3,000 bitcoins for a total of $155 million.
The approval of bitcoin-owning exchange-traded funds (ETFs) in the United States has also helped to boost the original and largest cryptocurrency by market value.
Trading volumes in several of the funds increased on Monday, and crypto-linked corporations climbed as well, contrasting with jittery broader markets.
Cryptocurrency trading: Bitcoin blasts beyond $52,000
Bitcoin surged to $57,036 in the Asian morning, its highest since late 2021. Ether rose as far as $3,275, its highest since April 2022. Bitcoin was last about 3% higher at $56,190, after earlier jumping to $57,055 for the first time since December of 2021.
Bitcoin – fueled by trader demand
Bitcoin reclaimed $57,000 for the first time since late 2021, fueled by investor demand via exchange-traded funds and additional purchases by MicroStrategy Inc.
The digital asset rose as much as 4.4% to $57,039 before reducing some of its gains to trade at $56,473 as of 10:22 a.m. Tuesday in Singapore.
Bitcoin’s price has risen 33% since the turn of the year, extending a long-running boom that has fueled speculative interest in smaller coins like Ether and BNB.
A total of $5.6 billion has been invested in a series of landmark Bitcoin ETFs that began trading in the United States on January 11, indicating that demand for the currency has expanded beyond committed digital asset enthusiasts.
The anticipated halving of the token’s supply increases the bullish feeling.
Bitcoin rises, MicroStrategy sees a boom
MicroStrategy, an enterprise software company that buys Bitcoin as part of its corporate strategy, announced on February 26 that it has purchased another 3,000 or so coins this month. The corporation now holds around $10 billion of Bitcoin.
According to Coinbase, the total value of digital assets is now above $2.2 trillion, up from a low of around $820 billion during the 2022 bad market, when FTX and other crypto platforms crashed.
Digital tokens are rising despite investors’ reduced expectations for softer monetary policy this year, as demonstrated by an increase in US Treasury yields.
Bitcoin has outperformed traditional assets this year, including stocks and gold. A ratio comparing the token’s price to the precious metal has reached its highest level in more than two years.
Crypto-related stocks rose in the United States on Monday. MicroStrategy grew 16%, Coinbase Global Inc. increased 17%, and Marathon Digital Holdings Inc. increased 22%.
Positive optimism carried to Asian digital asset stocks, with Tuesday’s gains in companies such as Japan’s Monex Group and South Korea’s Woori Technology Investment Co.
MicroStrategy fortunes
As of February 21, MicroStrategy had 190,000 BTC tokens in its portfolio, bringing its market worth to around $12 billion.
With the current rise, the company is now even closer to the S&P 500 list than it was previously, with a market capitalization of $13.4 billion on Nasdaq as February 27.
Notably, the news comes just hours after MicroStrategy’s X account was compromised, resulting in around $440,000 in losses for unknowing users.
The malicious actors specifically sent a phishing message on the firm’s X account, claiming that “$MSTR tokens” were available for purchase.
Online Trading: Surprising stocks you canโt afford to miss
Bitcoin price outlook: BlackRock ETF trading volume reaches $1.3 billion.
After surpassing the $54,000 mark, the Bitcoin price is at great risk of retracing to the psychological level of $50,000. However, if it closes with a candlestick above this level, the upside potential may persist, assuming BTC ETF trading volumes remain high for the rest of the week.
This could limit trader’s profit appetite as they await the halving in 51 days.
The upward potential is also high, as indicated by the Spent Output Profit Ratio (SOPR), which suggests that a correction is not imminent.
This is due to the SOPR remaining below one, at 0.91 as a 30-day moving average (MA).
For the uninitiated, this ratio suggests that BTC holders with unrealized profits have no intention of cashing in on their gains thus far.
Increased buying pressure might drive the Bitcoin price to $55,000. In a strongly bullish scenario, the BTC rise extends beyond $60,000.
Such a move would represent a 10% increase over current levels, potentially sending BTC into the supply zone between $60,050 and $67,789.
This would give it a chance to retake the $69,000 all-time high set in November 2021. The first sign would be a break and closure above $64,014, the range’s mean level.
Conversely, a rejection from $55,000 caused by profit-taking might boost the Bitcoin price to $55,000.
Earnings Season: How to Trade Apple, Amazon, Microsoft & More!
BTC/USD Technical Analysis
Bitcoin has seen a strong upward trend this week as demand has recovered. The spike occurred after the coin created a bullish flag pattern, one of the most common continuation signals.
This pattern is defined by a long vertical line followed by a consolidation period.
It has stayed above the 50-Arnaud Legoux Moving Average (ALMA). The pair also climbed beyond the crucial resistance level of $52,973, reaching its highest point this year. Furthermore, oscillators indicate renewed impetus.
As a result, the forecast for the BTC/USD pair is bullish, with the next level to watch at $58,000. The stop-loss for this trade is $55,000.
Bitcoin ETF AUM to Exceed Gold: In a groundbreaking move on January 10, the US Securities and Exchange Commission (SEC) approved multiple spot Bitcoin exchange-traded funds (ETFs) in one go.
Almost seven weeks later, the theme remains the driving force behind the cryptocurrency market, providing investors with a train to ride on as markets prepare for the BTC halving in 52 days.
According to Eric Balchunas, an ETF analyst at Bloomberg Intelligence, there is a good likelihood that Bitcoin ETFs’ assets under management (AUM) will surpass those of Gold ETFs in less than two years.
This assumption is based on the current slowdown in the gold ETF market.
According to Balchunas, reductions in the price and interest in Gold ETFs have occurred as markets shift toward BTC ETFs. He believes that the two financial products are now competing for assets.
According to Balchunas, BTC ETFs have amassed over $8 billion, making it even sweeter. “[BTC ETFs now command] 40% as much in assets and could surpass Gold in under 24 months.”
Evaluating how Bitcoin ETFs continue to haul in cash as investors bail on Gold, Balchunas notes that while BTC ETFs drew in nearly $5 billion in net new assets since they started trading on January 11, Gold ETFs have only managed $3.6 billion in outflows, with part of it going to the to the BTC ETFs.
Cryptocurrency Trading: Top 10 most popular crypto tokens!
US Dollar, markets down
Meanwhile, the US dollar fell on February 26, as markets anticipated a week of U.S. economic data that may provide new clues on when the Federal Reserve may begin decreasing interest rates.
The US dollar index, which measures the currency against a basket of peers including the yen, euro, and sterling, was steady at 103.77 in Asian time, after falling 0.17% on Monday.
Markets have all but ruled out a cut at the Fed’s March meeting, and expectations for one have lately been pushed out to June from May, according to CME’s FedWatch Tool, following solid consumer and producer price data in the United States.
The euro remained constant at $1.0850, following a 0.27% increase the previous day. Sterling fell 0.04% to $1.2680 after five consecutive days of gains.
Binance in hot water
On Friday, a US judge accepted Binance’s guilty plea and more than $4.3 billion penalty for breaking federal anti-money laundering and sanctions laws due to internal control failings at the world’s largest cryptocurrency exchange.
US District Judge Richard Jones in Seattle authorized the plea, which includes a $1.81 billion criminal fine and $2.51 billion in forfeiture, roughly an hour after the prosecution suggested revisions to Binance founder Changpeng Zhao’s bond, prompting objections from Zhao’s attorneys.
Binance’s plea, revealed in November, ended a years-long investigation into the exchange’s failure to notify more than 100,000 suspicious transactions involving designated terrorist groups such as Hamas, al Qaeda, and the Islamic State of Iraq and Syria, or ISIS.
Prosecutors claimed Binance’s platform also facilitated the selling of child sexual abuse materials and was one of the major beneficiaries of ransomware revenues.
Binance said in a statement on Friday that it accepted responsibility, updated its anti-money laundering and “know-your-customer” systems, and made “significant progress” toward the adjustments required under its plea agreement.
Zhao is free in the United States on a $175 million bond after pleading guilty to money laundering in November.
His plea resulted in a $50 million fine and his resignation as Binance’s CEO.
FTX sues lawfirm
A group of FTX investors has filed a proposed class action lawsuit against the U.S. law firm Sullivan & Cromwell, alleging that it engaged in the defunct cryptocurrency exchange’s multibillion-dollar fraud before enriching itself as FTX’s bankruptcy counsel.
Sullivan & Cromwell, which did legal work for FTX during the company’s rise, had a unique insight into the exchange’s “convoluted organizational structure, abject lack of internal controls, and dubious business practices,” the investors claimed in a 75-page lawsuit filed Friday in Miami federal court.
Lawyers at Sullivan & Cromwell, a major New York-based firm, “were eager to craft not only creative but misleading strategies that furthered FTX’s misconduct,” according to the lawsuit.
The firm has previously defended its work on FTX, claiming that it had a “limited and largely transactional” involvement with the exchange prior to bankruptcy and had never served as key outside counsel to any FTX entity.
The investors’ lawyers at the Moskowitz Law Firm could not be reached right away for comment. The same firm is already pursuing a second-class action investor case against legal firm Fenwick & West, accusing it of helping the company’s deception. Fenwick rejects the charges.
A federal judge ruled on Tuesday that the lawsuit against Sullivan & Cromwell will advance as part of the multi-district litigation over the FTX collapse, which is already proceeding in Miami federal court.
FTX declared bankruptcy in November 2022 following allegations that the company mishandled and lost billions of dollars in client crypto deposits.
A year later, FTX founder Sam Bankman-Fried was found guilty on allegations of defrauding FTX customers by using their funds to support his own dangerous investments.
The new lawsuit criticizes Sullivan & Cromwell’s role as court-approved lawyers advising FTX in its bankruptcy, claiming the firm knew FTX was in financial distress but “realized it stood to gain hundreds of millions more from their work in bankruptcy.”
Bitcoin miner lawsuit
Following a complaint filed by bitcoin miner Riot Platforms (RIOT.O) and an industry association, the United States Department of Energy (DOE) decided on February 23 to temporarily stop its emergency assessment of cryptocurrency miners’ energy use.
The DOE’s statistical arm, the U.S. Energy Information Administration (EIA), will suspend its obligatory survey for a month and sequester the data it had previously collected after beginning to collect information from bitcoin miners on February 5, according to a letter sent to a Texas federal court on Friday.
Riot Platforms and the Texas Blockchain Council sued the Biden administration in that court on Thursday, claiming that the survey will hurt businesses by requiring them to provide secret and sensitive information.
The EIA stated that the information is required to analyze concerns that cryptocurrency miners’ increased demand of electricity, fueled by high bitcoin prices, may represent an immediate danger to energy grid reliability.
The plaintiffs claimed in their case that bitcoin mines, which consume significant quantities of electricity for computing and cooling data processing centers, can actually improve reliability by being able to quickly shut down to counter spikes in energy consumption during severe weather, which can create blackouts.
They said that the EIA’s emergency demand was based on “speculation and conjecture” that bitcoin mining would pose a threat to the electricity grid and that it did not meet the appropriate public notice and comment requirements under federal paperwork reduction and administrative regulations.
They petitioned the court for a permanent injunction barring EIA from requesting the data without first complying with the law.
