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Bitcoin Price Breaches $51,000 While Market Capitalization Soars to $1 Trillion-What's to Know About Crypto Today

The crypto spring gets hotter as Bitcoin takes on $51,000 amid greedying sentiment and market cap ballooning to $1 trillion

With Bitcoin (BTC) above $50,000, it's safe to say that the beginning of 2024 marks the end of the bear market in crypto and the start of a new bullish cycle. Will BTC reach $100,000 in 2024? While it's highly likely to revisit the all-time high at $69,000, achieving $100K will be a tougher task. But never say never, especially when market participants are eagerly pursuing their insatiable greed. As of the time of writing, the Index shows 74, indicating that the crowd still feels a strong bullish sentiment, a huge improvement from last month, when the Index was at 52, with ‘neutral’ sentiment.  

 

Fear & Greed Index. Source: Altermative.me

This week witnessed another significant milestone in the crypto market as the market capitalization of Bitcoin surged past $1 trillion, a feat achieved previously only in November 2021 when Bitcoin hit its all-time high of $69,000. Notably, Bitcoin's current market cap positions it above some of the world's most prominent corporations. For instance, Berkshire Hathaway, with a market cap of approximately $850 billion, ranks eleventh globally, while Meta, ranked ninth, boasts a market cap of $1.173 trillion. At the time of writing, Bitcoin's market cap sits at $1.01 trillion, still trailing behind the largest tech corporations. Meanwhile, the total cryptocurrency market capitalization has surged to $1.93 trillion.

 

Total Crypto Market Cap Chart. Source: CoinGecko

Despite significant improvements over the past year, the present total market capitalization remains 30% less than the $3 trillion recorded at the height of the previous bullish cycle. This clearly signifies that more than half of all capital is currently parked in Bitcoin, giving it momentum for an even more intense rally that could result in the BTC price revisiting its all-time high. At the same time, Ethereum (ETH) is obviously an altcoin that receives a lion's share of capital, whereas other altcoins are fighting for the crumbles from the table.

 

BTC/USDT 1-Week Chart. Source: Tradingview.

Let's analyze the 1-week BTC/USDT chart to observe the current price action. In the previous Bitcoin price analysis, a liquidity gap was identified, suggesting that whales likely accumulated positions while retail traders panic-sold their BTC around the $38,000 mark. Following this accumulation, the price embarked on a significant rally, surging by 34% since the last week of January. Despite expectations of a deeper dive below the liquidity gap, it appears that major players primarily accumulated Bitcoin during the initial phase. The rally unveiled another liquidity gap between the intermediary support at $44,000 and the price level at $49,000. Currently, Bitcoin is targeting the psychological price level of $60,000, a point of interest for many traders looking to secure profits. Should the market correct after reaching $60K, it may test the determined second liquidity gap.

The reasons why Bitcoin price is up this month 

Bitcoin's price exhibited significant volatility in response to the release of hotter-than-anticipated US inflation data. Initially reaching $49,900, it swiftly dropped to $48,300 following the Consumer Price Index (CPI) report, which revealed a higher-than-expected inflation rate of 3.1%, surpassing the forecast of 2.9%. Core CPI, a measure excluding volatile food and energy prices, was even higher at 3.9%, exceeding the projected 3.7%.

This news caused turmoil in traditional markets, delaying expectations for interest rate cuts and leading prediction markets to forecast only four cuts in 2024. Despite this, Bitcoin demonstrated resilience, quickly rebounding to $49,900. This contrasted sharply with the S&P 500's negative response, suggesting Bitcoin's potential to thrive in an environment of increasing inflation. Here is CryptoStake’s take on the reasons why the Bitcoin price has been so awesomely bullish recently.

This week witnessed a momentous occasion for Bitcoin as inflows into spot ETFs skyrocketed to an unprecedented $631 million, spearheaded by The Nine's astounding $704 million surge. This substantial accumulation signals a notable change in investor sentiment, with major entities such as Blackrock ($493 million) and Fidelity ($164 million) participating in the buying frenzy. Across the last few trading sessions, the cumulative net inflow surged to an astonishing $2.07 billion, averaging more than half a billion dollars per day.

Additionally, worries regarding a potential Bitcoin crash stemming from Genesis' intended liquidation of GBTC shares have eased. Although the insolvent lender still intends to offload around $1.5 billion worth of these shares, a critical alteration to their Chapter 11 settlement brings relief: creditors will now receive repayments in-kind rather than through direct Bitcoin sales. This change reduces the pressure to sell immediately, easing concerns about the large number of shares involved. It's in line with the goals of long-term Bitcoin holders and could help stabilize prices in the future.

Signs of robust market strength are appearing, as CryptoQuant CEO Ki Young Ju notes a current situation where demand for Bitcoin surpasses its supply on OTC desks. These sizable off-exchange transactions, preferred by institutional investors for their privacy and limited market disruption, indicate a strong desire for Bitcoin. This imbalance in demand and supply on OTC desks implies that significant entities are actively acquiring Bitcoin, a positive sign for its future value.

Examining futures and spot market signals shows a bright future for Bitcoin, despite recent drops. Analysts at CryptoStake see this as a normal adjustment, not a negative trend. Important factors like declining funding rates and reset open interest indicate the market has endured challenges and is ready for growth.