Bitcoin (BTC) is on track to finish its strongest month since December 2020. Even with prices hovering near all-time records, this bull market isn't close to peaking, analysts said.
The largest crypto asset by market capitalization has gained a staggering 44% in February, piercing $50,000 and $60,000 for the first time in years and hitting a $64,000 high Wednesday. The rally followed a sell-the-news pullback below $40,000 following the debut of spot bitcoin exchange-traded funds (ETF) in the U.S. in late January.
Bitcoin has a shot at hitting its highest month-end price ever. To do so, it needs to top $61,357 by midnight UTC, the Oct. 2021 closing price near the peak of the previous market cycle. At press time, BTC changed hands at around $61,200.
February's crypto rally was broad-based, with the CoinDesk 20 Index (CD20) advancing more than 40%.
Decentralized exchange Uniswap's governance token (UNI), decentralized data storage network Filecoin's FIL, and popular meme token dogecoin (DOGE) were the best performers of the CD20, outperforming BTC's gains.
While bitcoin's price is hovering near its all-time high, some analysts still see further upside.
"We haven’t even begun to reach the heights this is likely to go." Alex Thorn, head of firmwide research at Galaxy, said in a market analysis posted on X (formerly Twitter) Thursday. He argued that the U.S. spot bitcoin ETFs are a "game changer," providing steady – and recently accelerating – demand for BTC. Meanwhile, some 75% of bitcoin's supply is owned by long-term holders, who have been unwilling to sell so far at recent price levels.
On-chain transaction volume on the Bitcoin network and retail interest in crypto are still far off from levels experienced during prior peaks, IntoTheBlock analysts noted.
Crypto analytics firm Swissblock predicted that bitcoin's current uptrend is "just the start of what is to come."
"Sustained buying pressure and strong bullish signals from both oscillators and moving averages suggest that BTC is poised for continued upward momentum," Swissblock analysts said in a Thursday report.
However, they urged caution against rushing into the market just now. "Instead of chasing the market at these elevated levels, a more prudent approach may be to wait for short-term pullbacks for buying opportunities," they wrote.
In a somewhat more bearish long-term outlook, a JPMorgan analyst report forecasted BTC to correct to as low as $42,000 after the April halving, when rewards for miners will be cut in half for the fourth time in Bitcoin history.
Source : CoinDesk by Krisztian Sandor / Mar 1, 2024