The price of Bitcoin has rebounded to the upside, surpassing the $66,000 price, after trading below the $63k price the previous week, which sparked widespread selloff of crypto assets.
Reports disclosed that profit-taking and large outflows from the Grayscale Bitcoin Trust are partly behind the sell-off. Additionally, the profit-taking led to a spike in long liquidations of leveraged Bitcoin positions.
About $122 million in long liquidations occurred across centralized exchanges on Monday, according to Coin Glass. Also, Data from CryptoQuant showed a massive spike in short-term holders selling their Bitcoin at a profit on March 12.
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With the price of Bitcoin retracing back up, currently trading at $67,050 at the time of writing this report, reports reveal that the weakness in the dollar aided Bitcoin’s recovery, as the greenback fell sharply from two-week highs after the Fed.
Cryptocurrencies strengthened at the end of the Federal Reserve’s two-day policy meeting, where the central bank held rates steady, as expected, and said it still sees multiple rate cuts this year. It is understood that like tech stocks, Bitcoin sometimes benefits from low interest rates and improved market liquidity, which can lead to better sentiment and greater investment in growth assets.
Notably, this trend also supported the broader cryptocurrency market, with Ethereum rising by 10% on Thursday. Other popular altcoins like Dogecoin, Ripple, Solana, and Litecoin saw notable gains as well.
Commenting on Bitcoin’s recent retracement to the upside, Co-founder and CEO of Mudrex Edul Patel said,
“Bitcoin bounced back to the $67,000 level as the US Federal Reserve Chair Jerome Powell hit a dovish tone and the central bank kept the key rates unchanged for the 5th straight meeting. The global crypto market cap also saw an 8% increase over the past day. The next resistance now lies at the $69,400 and then $73,000 levels. On the other hand, if Bitcoin falls back the support lies at the $65,000 level. Most cryptocurrencies along with traditional markets climbed higher.”
Also commenting, CEO and co-founder of Unocoin Sathvik Vishwanath noted that Bitcoin’s rebound signals continued Bullish sentiment with the potential to retest record highs.
“Despite the recent pressure to take profits, Bitcoin’s move back is within the typical range seen in bull markets. With the expectation of shallower corrections and the potential for a retest of the highs, Bitcoin remains on track to reach $100,000 this year or next”, he added.
Gladstein predicted that the upcoming “halving” of Bitcoin, or the process by which the rewards users reap for adding blocks to the blockchain is greatly reduced, would lead to another spike in its price.
Bitcoin is already up more than 50% so far in 2024, after a stellar upward trajectory, rallying by 100% through 2023. The token’s latest gains were driven by increased capital inflows after the approval of spot exchange-traded funds (ETFs) for U.S. markets earlier in 2024.
With ETFs approval making investing in Bitcoin much simpler for traditional investors, analysts say this could prime Bitcoin for a rally later in 2024, as they expect the crypto asset to cross the $100,000 level by the end of 2024.
Amid a bullish prediction for the crypto asset, there have been continuous reminders of how volatile the crypto market tends to be, as traders are advised to trade with caution.