- Bitcoin (BTC) trading around $54,368.84 as of 21:00 UTC (4 p.m. ET). Climbing 5.02% over the previous 24 hours.
- Bitcoin’s 24-hour range: $51,428.66-$54,813.03 (CoinDesk 20)
- BTC trades above its 10-hour and 50-hour averages on the hourly chart, a bullish signal for market technicians.
Bitcoin headed for its fifth straight daily gain, the longest winning streak this year, as a pullback in U.S. government-bond yields rekindled demand for risky assets like technology stocks and cryptocurrencies.
Analysts who track price-chart patterns said bitcoin’s climb to about $54,000 could position the largest cryptocurrency for a fresh ascent toward last month’s record price above $58,000, and from there potentially to $60,000 or higher.
“Bitcoin is recovering after having logged a short-term oversold reading in late February above its rising 10-week moving average,” Katie Stockton, a technical analyst for Fairlead Strategies, wrote in her newsletter on Tuesday. “Short-term momentum is positive and there is room to initial and final resistance near $58,000.”
Bitcoin’s gains this week were anticipated in the bitcoin futures markets, according to Robbie Liu, market analyst at OKEx Insights. He’s affiliated with the OKEx cryptocurrency exchange, where a key metric known as the long-and-short ratio fell below 1.0 on Sunday for the first time this year. The quarterly contract premium narrowed to less than 1%.
“In a bull market scenario, a long-and-short ratio below 1.0 and a very small quarterly contract premium may reflect an overly bearish market sentiment, often the sign of an impending price reversal,” Liu told CoinDesk.
According to Konstantin Anissimov, executive director of U.K.-based crypto exchange CEX.io, in a daily newsletter on Tuesday, the oldest cryptocurrency was also getting uplift on Tuesday from the continued momentum of President Joe Biden’s proposed $1.9 billion coronavirus relief package, which is designed to stimulate the U.S. economy.
Some investors say that bitcoin might serve as an effective hedge against inflation if the flood of money ends up spurring price increases.
As with earlier stimulus bills since the coronavirus hit a year ago, bitcoin’s price appears to benefit. “Should history repeat itself, bitcoin will be on track to retest new price levels above its previous all-time high of $58,000 in the coming weeks or months,” Anissimov added.
Tuesday’s bullish sentiment on bitcoin was reflected in the performance of technology shares. Tech stocks suffered heavily in recent weeks amid rising Treasury yields and a sell-off in the bond markets because rising fixed-income returns theoretically diminish the appeal of riskier assets, The Nasdaq 100 Index jumped Tuesday after falling over the past few weeks.
Bitcoin was also reportedly whipsawed by the investor anxiety over rising Treasury yields. But data shows bitcoin has shown stronger resilience during the latest market correction, with the 90-day correlation between bitcoin and macro assets continuing to decline over the past few months.
“Bitcoin’s price bottomed out near $43,000 and the Nasdaq’s plunge on March 3-4 did not trigger the leading cryptocurrency to hit a lower low,” Liu said.
Ether faces medium-term downside volatility
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up on Tuesday, trading around $1,835.54 and climbing 3.62% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
On the hourly price chart, ether has gained short-term momentum, rising from its 10-week moving average, said Stockton. But an overbought downturn on February’s weekly price chart suggests that ether’s rebound may “give away to additional downside volatility.”
A potential support level is near $1,255, according to Stockton.
Digital assets on the CoinDesk 20 are all in green Tuesday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
There were no notable losers as of 21:00 UTC.
- Asia’s Nikkei 225 closed in the green 0.99%.
- The FTSE 100 in Europe went up by 0.17%.
- The S&P 500 in the United States was in the green 1.42%.
- Oil was down 1.81%. Price per barrel of West Texas Intermediate crude: $63.87.
- Gold was in the green 1.98% and at $1716.69 as of press time.
- The 10-year U.S. Treasury bond yield fell Tuesday, dipping to 1.536%.