Bitcoin, the top cryptocurrecy, surged to $21,594, the highest level since September 2022, earlier today on the Bitstamp exchange.
Bitcoin’s recent surge is a signal of increasing appetite for risk by traders who foresee a shift in the monetary policies of the U.S. Federal Reserve and other central banks.
Cryptocurrencies like Bitcoin continued their rally on Tuesday, soaring to their highest levels since before FTX’s financial collapse. In November, the bellwether cryptocurrency collapsed to as low as the $15,000 level, which ended up being the bottom of the last correction.
The flagship cryptocurrency experienced its best weekly gain since February 2021 with a 23% increase over the course of seven days. As noted by Bloomberg, this kind of climb is rare — it has only happened nine times in the last five years and normally translates into gains upwards of 40% within a three-month period.
With inflation being a deciding factor in the direction of risk assets, key macro factors should be watched closely by traders in order to anticipate future movements.
Despite this momentum, crypto analysts caution that the underlying fundamentals of the digital asset do not match its current value.
Katie Stockton of Fairlead Strategies recently cautoined against chasing this market rally too far given overbought conditions expected later in the week combined with strong resistance near the $21,500 level.
As reported by U.Today, Bitcoin permabear Peter Schiff also recenty warned that Bitcoin was on track to revisit the $18,000 level.