Bitcoin has been experiencing a gradual increase in price since the beginning of the year, which is a significant difference from the market downturn witnessed last year following the collapse of several notable cryptocurrency structures. According to CoinMarketCap, Bitcoin surpassed the $30,000 mark for the first time since June 2022 in recent days. A senior analyst at K33 Research, Vetle Lunde, predicted that the price of Bitcoin could reach $45,000 next month.
Bitcoin has outperformed the Nasdaq 100 tech index in gains, rising by 82% since December 31, compared to the index's 19% increase. Gold, another popular investment option, has seen a 9.6% rise in value this year. The current rise in Bitcoin's value has brought it past the point where hedge fund Three Arrows Capital failed last summer, but it is still more than 50% lower than its all-time high in November 2021. Experts believe that Bitcoin's partial recovery could be linked to the expectation that the US banking crisis in March will force the Federal Reserve to halt rate hikes.
The recovery of Bitcoin has led to the belief among some investors that it will provide a haven from the turbulence in traditional finance and benefit from lower real interest rates. The global crypto market has seen a 4% rise in the last 24 hours, with Bitcoin accounting for 47% of the market's current $1.2 trillion market cap.
Analysts are excited that Bitcoin is following its early 2019 surge, which is great news for cryptocurrency enthusiasts and investors. According to Vetle Lunde, the drop in Bitcoin's value and its subsequent recovery are similar to the trend observed in the 2018-19 bear market in terms of length and trajectory. The increase in value over the past year follows a 12-month drop that saw prices decline by 76% and bottom out in November 2022. Lunde noted that both cycles had bottoms that lasted approximately 370 days and reached a peak-to-trough return of 60% after 510 days. In 2018, the bear market rally peaked 556 days after the 2017 high, on June 29, 2019, with a 34% drawdown from the peak. If the fractal were to continue, Lunde predicts that Bitcoin would peak around May 20 at $45,000.
In 2018, Bitcoin fell by 84%, with prices bottoming near $3,100 in December. However, the trend changed in the following months, with prices climbing to $3,700 by the start of 2019 and rising as high as $13,800 by the end of June. Some notable traders expected a continuing sell-off in the first quarter, making Bitcoin's year-to-date rise in value a "hated bullish move" on Twitter, according to crypto analysts.
A "hated" bull market typically starts at the height of pessimism and reaches a fever pitch when investors who lowered risk in anticipation of a prolonged decline start to feel underexposed and get on the bullish bandwagon. Lunde notes that the early 2023 rally has all the hallmarks of a hated rally, similar to the one that occurred in 2019, which ended with a significant blow-off top before Bitcoin resumed trading at a 40-60% drawdown from its 2017 all-time high. However, recent CoinDesk data reports that Bitcoin declined by 1.4%, dropping to $29,850. Investors will be excited by these exhilarating predictions, hoping that cryptocurrency's good times are here to stay.
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