By Michael Scott
Bitcoin portrayed a stunning bullish steam to blast past the $60,000 as the crypto market witnessed a snippet of extreme greed 51 days to the April halving. Bitcoin shattered the elusive $60K barrier to test $60,700, though it retraced momentarily to $60,503.
The largest crypto by market capitalization, as per CoinGecko, would regain the bullish steam and surge to an impressive 6.2%. The leap led to an 18.3% seven-day gain and an astonishing 158% 12-month rally.
Bitcoin Rally Closer to All-Time High
The remarkable rally realized by Bitcoin triggered widespread market sentiments that accelerated the momentum as investors reacted to the news. The spike saw the market analysts’ and investors’ eyes turn on the price that rose steadily to $63,636 on Wednesday before a flood of liquidations briefly eroded the gains to know the price below 60,000.
While Bitcoin tumbled to $59,557, the gains made during the day saw the token edge 9% closer to matching the all-time high of $69,044 realized on November 10, 2021. The fluctuation of distance to the all-time high fluctuated fast on Wednesday, barely two months before the widely discussed supply crunch in late April halved.
Bitcoin Displays Wild Bullish Pump
A review of the wild rally that unfolded across the digital assets on Wednesday reveals that Bitcoin ascended to levels last witnessed on April 12, 2021, as per CoinGecko. The uptrend momentum displayed by Bitcoin traces on Monday, February 26, when the price climbed from $50,926 to $56,737 on Tuesday, as per CoinGecko data.
The pump replicated on Wednesday, enabling Bitcoin to cross $63,000 by 9 am ESTtill 12 pm EST, when liquidations knocked the price back to below $60,000.
A glance at the wild rally that radiated across the global crypto market to rise 7.1% and test $2.44 Trillion. The entire crypto space saw the daily trading volume hit $246 Billion, with Bitcoin accounting for 50.5% dominance while Ethereum was 17.1%.
The bullish momentum realized on Wednesday is attributed to the US Securities and Exchange Commission’s decision to approve 11 spot Bitcoin exchange-traded funds (ETFs) amid upcoming halving. The approval granted by the Gary Gensler-chaired securities watchdog has ushered in a new swarm of investors whose inflows are behind the Bitcoin price skyrocketing.
The awareness of reduced rewards to miners for every block completed fuels the rush to acquire Bitcoins. However, halving that occurs every four years is anticipated to occur in less than a two-month period, though the exact time and date remains uncertain.
The bullish momentum coincided with SkyBridge Capital founder Anthony Scaramucci observing in a CNBC interview that the price rally is wrecking investors who went short on Bitcoin. The American financier disagreed with JPMorgan chief Jamie Dimon, who urged the policymakers to shut down Bitcoin. He speculated that Bitcoin’s halving would cause the token price to quadruple to shatter past $200,000.
Bitcoin Blow-Off Top Explained
A review of yesterday’s market activity qualifies Dimon’s pronouncement when interviewing with CNBC during the Global High Yield & Leveraged Finance Conference. The banker observed that the financial market can quickly transform, warning against overly focusing on short-term economic indicators and overlooking long-term trends.
Dimon fears were affirmed by the blow-off top experienced by Bitcoin when the price tumbled despite rallying over 12% in a few hours. The tumble cascaded into a series of crypto liquidations.
Bitcoin stunned the market as the price rocketed by 11%, only to quickly plunge to end the day’s rollercoaster with over $640 million in crypto positions liquidated within hours, as per CoinGlass. A period of 12 hours saw crypto short positions worth $309M liquidated with another $333M from long positions. A substantial amount of the liquidations, estimated at $424 million, occurred within four hours.
A scrutiny of the CoinGlass data shows that about 183,145 traders liquidated to raise the total liquidations to $757.19 million in the past 24 hours. Bitcoin accounts for $274.20M, while Ethereum is second at $121.68M, as per CoinGlass data.
The derivatives head at the blockchain analytic firm Amberdata, Greg Magadini, attributed the huge sum of liquidation witnessed in a condensed period to moments when crypto assets such as Bitcoin realize brief and extreme rallies, as seen on Wednesday.
Magadini linked the blow-off top experience to the fear- of missing out (FOMO), creating a euphoric trend where second prices tick down, resulting in a cascading effect.
Magadini explained that as the prices fall from an impressive uptrend sprint, the highly leveraged traders are compelled to liquidate. Such a scenario brings the asset price down, forcing the leveraged traders to the next level to liquidate. The process dragged prices lower, leading to a blow-off top phenomenon that snowballed, causing the Bitcoin price to tumble.
Surprisingly, Bitcoin only slid a few points as it recovered to trade above $63,600 after 12 pm ET before shedding value at testing $60,000 within an hour.
Bitcoin has since exchanged hands at $62,552.25 by press time 10:14 UTC, as per CoinGecko. Bitcoin is still 5.5% up in the past 24 hours and 44.1% in its 30-day run to move 9.1% closer to the all-time high.