Bitcoin and other cryptocurrencies have experienced a strong rally, bouncing back to retest 18-month highs after a recent correction. Analysts believe that there is more upside potential if digital assets can maintain their momentum.
Bitcoin Price Surge
The price of Bitcoin has seen a 4% increase in the past 24 hours, reaching $37,350. It briefly traded near $37,900, revisiting the levels reached last week, which were the highest since the crypto market’s bear market in May 2022. Although Bitcoin had seen a decline in recent days, falling back to the $35,000 zone, it seems that the rally, which has brought it one-third higher over the past month, has now resumed.
According to Alex Kuptsikevich, an analyst at broker FxPro, “The crypto market experienced a new growth spurt. For now, it is not giving up… the chances of further gains are higher than a reversal to the downside. If we accept that Tuesday’s decline was a correction, it has opened the way to $45,000 to $46,000.”
Factors Supporting Bitcoin
Bitcoin’s bullish behavior is supported by several factors. There is ongoing optimism among investors that regulators will approve the first spot Bitcoin exchange-traded fund (ETF) very soon. This approval is expected to bring in a fresh wave of investor interest. Additionally, a positive macroeconomic backdrop, characterized by the Dow Jones Industrial Average and S&P 500’s upward trajectory and hopes that the Federal Reserve has finished raising interest rates, has also contributed to the rise in cryptocurrency prices.
However, analysts at J.P. Morgan caution that there may be looming risks for digital assets. They believe that the crypto rally has been overdone. The potential tailwinds from the spot Bitcoin ETF approval are exaggerated, the gains that can be expected from a change in supply over the next year are mostly priced-in, and the regulatory environment remains unfavorable, according to the analysts’ recent note.
In addition to Bitcoin, Ether, the second-largest cryptocurrency, has gained 3% and is currently priced at $2,050. Smaller tokens or altcoins have had mixed performance, with Cardano climbing 10% while Polygon fell by 2%. Memecoins, such as Dogecoin and Shiba Inu, experienced significant gains, with Dogecoin jumping 10% and Shiba Inu rising by 7%.