Floating Bitcoin Helps Crypto Market Surge Over $ 2 Trillion Barrier

The market capitalization of Bitcoin has reached $ 902 billion.

As the gloomy first quarter draws to a close, crypto seems to have the wind in its sails. It has broken through the $ 2 trillion barrier and proved surprisingly resilient in the midst of global chaos.

At Monday’s high of $ 47,765, market-leading bitcoin broke above the small range of $ 34,000- $ 44,000 traded for most of 2022. Through a steady grind higher than the low just above $ 40,000 on March 21, it has gained 18%.

Its comparative stability, compared to previous performance at least, contrasts with the stock market, traditional currencies and even safe-haven gold, which has been shaken by the Russian invasion of Ukraine as well as the tightening of the Federal Reserve.

The excitement of Bitcoin has been waning lately.

Its 30-day volatility is around 4%, about two-thirds of the level in June 2021, according to Coinglass futures trading platform. The highest this year was 4.56% on March 16th.

This measures its deviation from its own standard level, and bitcoin is still undergoing wild changes, such as the 17% jump on March 1st. But it’s clearly more tame than in 2021 when it can move as much as 40% in a day.

By comparison, the high-tech Nasdaq was up 5-6% in a few days in 2022, and down 20% for the year on March 14, before it rose to halve that loss.

“The biggest conflict we’ve seen in Europe since World War II has really rocked the global market,” said Pierce Crosby, General Manager at the TradingView charting platform in New York.

“What we’re seeing across other key assets is a huge impact – from both the U.S. equity market as well as the global market,” he added. “Bitcoin has more or less remained in a fairly tight range … but actually, in terms of relative strength, it’s very bullish.”

Crypto $ 2 Trillion

The total market value of cryptocurrencies rose to more than $ 2 trillion on Friday, according to analytical platform CoinMarketCap. To put it in context, the market briefly hit $ 3 trillion on November 10, when bitcoin reached $ 69,000.

The winding climb back above $ 2 trillion has slowed and has also been helped by rapidly growing coins and tokens – the number of CoinMarketCap counts has increased nearly 5,000 since November to 18,511 cryptocurrencies.

Bitcoin’s market capitalization has reached $ 902 billion, but it still has a way to reclaim the $ 1 trillion it ordered in November. While still the dominant crypto, its market share has also fallen gradually from as much as 70% of total capitalization in early 2021 to 42% now.

What awaits?

Many crypto investors think they can predict the direction of bitcoin before the volatile cryptocurrency causes them to slip into financial trouble.

“While bitcoin remains strong in the short term, rising oil prices increase the likelihood of a recession in the next year or so,” said Marcus Sotiriou, an analyst at UK -based digital asset broker GlobalBlock.

“Oil has risen around 25% in the last six days alone, and bitcoin bulls will want to see this tail for continued strength.”

That said, certain other technical factors point to a rise in the price of bitcoin.

The funding rate, which measures the cost of holding bitcoin through futures, has turned positive little after negative for most of this year, indicating investors are willing to pay for a long period of time. It is at 0.003% on the CryptoQuant analytics platform, although still below the 0.06% high reached in October.

Coinglass’s longs-to-shorts ratio has also risen from 0.95 on March 20 to 1.1, the highest level in at least four weeks.

Blockchain data provider Chainalysis said the growing share of bitcoin – nearly 60% of total supply – has been on hold for more than 52 weeks, up from 54.72% in the past 25 weeks.

Yet Ashwath Balakrishnan, vice president of research at Delphi Digital in Bengaluru, warns that it is difficult to identify a sustainable market direction.

“Everybody’s pretty careful,” he said. “If (bitcoin) pushes $ 46k and goes down again then it probably means we’re stuck in a tied state for at least another month or so.”


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