Bitcoin and other cryptocurrencies continue to make gains, defying the turbulence in the stock market that would have previously shaken the crypto market. Analysts believe that the growing perception of digital assets as a safe haven during times of geopolitical risks might be influencing this trend.
In the past 24 hours, the price of Bitcoin has risen by 1% and is now hovering around $34,450. This puts it within striking distance of its recent peak above $35,000, which was reached earlier this week. This peak represents the highest level since cryptocurrencies went into a bear market in May 2022. Over the past two weeks, Bitcoin has surged by approximately 30%, breaking free from a period of relative stagnation characterized by historically low trading volumes.
According to Alex Kuptsikevich, an analyst at broker FxPro, there have been a series of higher lows that have brought the price of Bitcoin closer to the upper limit of its consolidation range since Tuesday. Kuptsikevich states that Bitcoin is currently in low-density territory and that it may face key resistance levels at $38,000 or even $48,000. However, he believes that reaching the upper boundary in the coming weeks will not be an easy task.
One of the primary driving factors behind the recent rally in Bitcoin’s price is optimism surrounding the potential approval of the first spot Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission. If approved, this ETF is expected to trigger a fresh wave of investor interest in the cryptocurrency market.
Bitcoin’s Resilience in Stock Market Turmoil
Bitcoin has exhibited remarkable resilience amidst the ongoing turmoil in the stock market. While cryptocurrencies are typically regarded as high-risk assets that mimic the behavior of stocks, Bitcoin has managed to maintain its stability and even experienced gains despite declines in the Dow Jones Industrial Average and S&P 500. This is noteworthy given the recent downbeat corporate earnings and concerns surrounding higher interest rates, which have contributed to the stock market’s downward trend.
In light of the unsettling selloff in equities, Bitcoin and other major altcoins have emerged as potential safe haven assets. According to Kuptsikevich, the crypto market has been able to preserve its total capitalization amid these market conditions. This demonstrates how Bitcoin, often referred to as “digital gold,” is gradually adopting the characteristics of a haven asset that investors seek during times of volatility. This shift may mark a new era for Bitcoin, as its correlation with gold has been growing stronger, particularly in response to conflicts in the Middle East. As a result, digital assets could see further upward momentum.
In addition to Bitcoin’s performance, other cryptocurrencies have also gained positive traction. Ether, the second-largest crypto, surged by 4% to reach $1,850. Similarly, smaller tokens and altcoins experienced upward movements, with Cardano surging by 5% and Polygon rising by 4%. Notably, even meme coins have displayed remarkable buoyancy, with Dogecoin rallying by 10% and Shiba Inu climbing by 9%.
Overall, it is evident that Bitcoin’s resilience and potential as a safe haven asset are becoming increasingly recognized. As the cryptocurrency market navigates through turbulent times, investors should keep a close eye on Bitcoin’s correlation with traditional safe haven assets like gold, as this could drive further growth in digital assets.
By Jack Denton (Contact details removed)
