Bitcoin experienced a tumultuous ride as it navigated through record highs and sharp swings on Tuesday, leaving investors on edge and traders assessing the sustainability of its rally.
The largest digital asset surged approximately 4% to reach $66,000, only to see its value tumble below $60,000 after touching an all-time peak of $69,191.95 the day before.
This series of dramatic fluctuations underscored the inherent boom-and-bust nature of the original cryptocurrency.
The recent rally was fueled by various factors, including inflows into US spot-Bitcoin exchange-traded funds (ETFs), anticipation of a reduction in the token’s supply growth, and speculative derivatives bets.
Stefan von Haenisch, the head of trading at OSL SG Pte in Singapore, anticipated a period of range-trading in the coming days, with Bitcoin prices expected to hover around the $60,000 mark.
Data from Coinglass revealed that over $1 billion worth of bullish and bearish crypto wagers were liquidated in the past 24 hours in derivatives markets.
Despite the recent dip, Bitcoin has surged by 55% since the beginning of 2024, outpacing global stocks and fostering optimism across the digital-asset market.
The approval of spot-Bitcoin ETFs by the US Securities and Exchange Commission in January expanded Bitcoin’s accessibility to mainstream investors, marking a significant milestone for the cryptocurrency sector after enduring a bear market in 2022 and subsequent industry challenges.
The influx of approximately $8.6 billion into ETFs issued by major financial institutions like BlackRock Inc. and Fidelity Investments collided with expectations of a slowdown in Bitcoin’s supply growth, anticipated through the halving event scheduled for April.
Amidst these dynamics, market observers wonder whether the ETF investor cohort will weather the recent price oscillations, highlighting the ongoing evolution and maturation of the cryptocurrency market.
