The world’s biggest cryptocurrency Bitcoin touched a 19-month high above $42,000 which was triggered by some “panic buying”, reports said on Tuesday.
The surge in Bitcoin prices pushed the crypto market capitalization over $1.5 trillion for the first time since May 2022, when Terra crypto token collapse kicked-off the crypto winter.
Bitcoin was hovering around $41,700 per token on Tuesday.
According to analysts, bets on lower interest rates, spot bitcoin ETF anticipation and “panic buying” helped the rally, reports CoinDesk.
Smaller crypto tokens, however, lagged behind, with ether (ETH), BNB and ADA gaining 2-3 per cent during the day, while XRP traded flat.
“This shows panic buying from traders who are closing out shorts or increasing leveraged longs,” according to crypto investment services provider Matrixport.
The macroeconomic environment is also supporting Bitcoin’s price rise. “Dovish talk from some Fed officials, a weakening dollar, and relatively sturdy domestic data helped propel markets over the weekend,” Alex Thorn, head of research at digital asset investment firm Galaxy, was quoted as saying in the report.
While Bitcoin’s outlook looks bright, there are some possible short-term headwinds looming, according to analysts.
“The reason for concern is that even though selling pressure was being exhausted in the futures markets, there was a lack of follow-through from spot markets,” Bitfinex analysts said.
Bitcoin is up more than 150 per cent year-to-date, and it is one of the world’s best-performing assets on a risk-adjusted basis. “Despite the run, Bitcoin remains very constructive,” said analysts.
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