After Breaching $50K, Bitcoin Gives Up Earlier Gains
Markets still remain bullish; retail traders take to derivatives.
Bitcoin’s price saw a retracement of its earlier gains on Tuesday, but the market expects that it will soon resume its long-term bullish trend and push fresh new all-time highs.
For a brief moment during early New York trading hours, bitcoin broke above $50,000 for the first time ever. However, at press time bitcoin’s price was trading at $48,249.23, down 0.29% in the past 24 hours, according to CoinDesk’s BPI.
“It’s an impressive milestone for bitcoin [reaching above $50,000] that the crypto community has been waiting for,” Alessandro Andreotti, bitcoin over-the-counter broker, told CoinDesk. “In my opinion we are going to keep reaching fresh new highs soon.”
The pullback after the record high price at $50,584.85 will not be long-lasting, according to Andreotti.
That is a sentiment echoed by analysts and traders, who note that significant amounts of liquidity flowing into the crypto market as a whole has been the underlying driver of the rally over the past few days.
The market opened last week with the news that Elon Musk’s Tesla purchased $1.5 billion worth of bitcoin as part of the company’s balance sheet strategy. Since then, bitcoin’s price has been able to hold onto those gains, despite a small-scale price retreat like the one that happened on Feb. 14.
On the retail side, the derivatives market has been on the rise.
In particular, bitcoin’s March futures on the retail-focused platforms have an annualized premium rate averaging at 44.16% at the moment. That outpaces those on the institution-driven Chicago Mercantile Exchange, which averaged at 24.39%, noted Arcane Research’s newsletter dated Feb. 16. Higher premiums indicate more demand on a particular platform.
“Retail traders want that upside exposure and are pricing the futures that expire in March at a premium of almost 5% to the spot price,” the newsletter said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.