Bitcoin and other cryptocurrencies have experienced a rally, reaching fresh 18-month highs. This surge in momentum is supported by various factors that indicate further gains are possible.
Over the past 24 hours, the price of Bitcoin has risen by 4% to surpass $36,800. This is the highest point since May 2022 when the crypto market faced a severe downturn due to the collapse of the stablecoin network Terra and subsequent industry bankruptcies. In just a few weeks, the leading token has climbed by more than one-third, leading experts to believe that a new bull market is emerging and putting an end to a period of historically low volatility and trading volumes.
According to Douglas Comin, a senior crypto options trader at investment group XBTO, the milestone to watch for is the breakthrough above the $37,000 mark. He expresses optimism about Bitcoin’s price action in the future, noting that the momentum is likely to continue as institutional investors show increasing interest in the cryptocurrency market.
Compared to traditional financial indices like the Dow Jones Industrial Average and S&P 500, Bitcoin has significantly outperformed. While it benefits from crypto-native catalysts, there has also been an overall improvement in the backdrop for risk-sensitive assets. The primary driving force behind this recent rally is the anticipation of approval for the first spot Bitcoin exchange-traded fund (ETF) by U.S. regulators. If approved, this ETF is expected to generate renewed retail and institutional investor interest in cryptocurrencies.
Given these factors, there is strong reason to believe that the upward trend and gains for cryptocurrencies will continue.
Traders Bullish on Crypto as Bitcoin Shows Signs of Rally
Market Outlook and Technical Analysis Support Upside Potential
Traders in the crypto market are displaying extreme bullishness, as evidenced by their increasing involvement in crypto derivatives. This influx of activity is expected to exert upward pressure on prices. Rachel Lin, CEO of trading platform SynFutures, highlighted the significant number of Bitcoin call options expiring next month, particularly around the $40,000 and $50,000 levels.
In addition to trader sentiment, technical analysis also suggests a favorable market backdrop for a potential rally. Katie Stockton, managing partner at technical research firm Fairlead Strategies, pointed out that the next resistance for Bitcoin could be near $42,200 in the event of another breakout. According to Alex Kuptsikevich, an analyst at broker FxPro, the current price levels of Bitcoin are in “low-density territory,” which indicates a range that Bitcoin has not spent much time in during previous bullish periods.
Furthermore, the supply of Bitcoin tokens is currently tight, as long-term holders are reluctant to sell near all-time highs. This limited supply, coupled with the high demand from bullish traders, has the potential to fuel substantial gains in the near future. Analysts from crypto market research group Glassnode anticipate exciting months ahead for Bitcoin investors.
While Bitcoin remains a key focus, other cryptocurrencies are also experiencing positive momentum. The second-largest crypto, Ether, has gained 2% and is now trading above $1,900. Smaller tokens and altcoins such as Cardano and Polygon have also posted solid gains of 5% each. Even memecoins like Dogecoin and Shiba Inu saw advances of 2% and 4%, respectively.
The overall outlook for the crypto market appears optimistic, with multiple factors indicating the potential for a rally and substantial gains across various cryptocurrencies.