The cryptocurrency bull market was firing on all cylinders in Tuesday trading when Bitcoin (btc) surpassed $57,000 for the first time in more than two years, a discouraging move for traders who were hoping for a significant pullback as an opportunity to allocate funds to the leading cryptocurrency.
While the cryptocurrency rally continued, stocks traded in a holding pattern as investors continued to practice patience following last week's rally to new all-time 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 market exposure.
At the closing bell, the S&P and Nasdaq finished in the green, rising 0.17% and 0.37%, respectively, while the Dow Jones fell 0.25%.
Data provided by TradingView shows that Bitcoin bulls extended Monday's rally into Tuesday trading, pushing BTC to an afternoon high of $57,660, its highest price since December 3, 2021. At the time of writing this article, Bitcoin is trading at $56,800, up 4.1% on the 24-hour chart.
BTC/USD Chart by TradingView
โThere are a variety of factors influencing market sentiment and rising cryptocurrency prices,โ Bakhrom Saydulloev, product lead at Mercuryo, said in a note to Kitco Crypto. โIn my opinion, this recent rally can largely be attributed to the upcoming halving event and the anticipation surrounding it. Historically, these events have been associated with significant Bitcoin price increases, as reduced supply leads to greater scarcity, which increases demand.
Saydulloev said the halving "remains the main bullish factor for BTC, driving the entire crypto landscape, as several players anticipate its impact on Bitcoin's price trajectory in the coming months."
"The fact that the S&P 500 reached new all-time highs and the positive attitude of investors extending from traditional markets is another factor," he added.
As for how long the bullish trend will last, Saydulloev said the impact of gold ETFs on the price of gold provides insight into the path the price of Bitcoin could take.
"The launch of the first gold-backed exchange-traded funds in 2004 greatly accelerated the rise in gold prices, which continues even today, 20 years later," he said. "In the same vein, Bitcoin's current rally suggests that a similar pattern may emerge in the cryptocurrency market."
โFurthermore, anticipation around the possible launch of a Bitcoin ETF has fueled optimism among investors, leading to increased demand and bullish price momentum,โ Saydulloev said. โIf historical trends are any indication, these developments could catalyze further Bitcoin price growth and lead to sustained year-over-year growth, similar to that of gold.โ
According to veteran trader Peter Brandt, the recent rise above a key resistance level suggests Bitcoin could hit a high of $200,000 as the bull market extends into late 2025.
Bitcoin Update
With the push above the upper boundary of the 15-month channel, the target for the current bull market cycle scheduled to end in August/September 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/19ZXpAQW0vโPeter Brandt (@PeterLBrandt) February 27, 2024
Altcoin rotation is underway
On Tuesday, cryptocurrency traders shifted from recent high-flying altcoins to tokens showing near-term promise, resulting in mixed performance for the top 200 tokens, with most projects posting profits.
Daily cryptocurrency market performance. Source: Coin360
Meme coins were the best performers, led by Pepe (PEPE), which rose 50.6%, followed by a 35.4% gain for FLOKI (FLOKI) and a 31.5% rise for dogwifhat (WIF ). COTI (COTI) posted the biggest loss, falling 17.3%, while Worldcoin (WLD) declined 12.15% and SingularityNET (AGIX) lost 10.7%.
The overall cryptocurrency market capitalization now stands at $1.05 trillion, and Bitcoin's dominance rate is 38%.
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