Bitcoin at $50K: testing new highs

Bitcoin, the world’s largest cryptocurrency,crossed the $50,000 mark last week, spurred by the renewed interest in high-risk assets as the US Fed prepares to lower interest rates, along with the potential halving of the cryptocurrency in Aorilthis year. The US Securities and Exchange Commission’s approval for Bitcoin ETFs has also added confidence to the market.

Research from Bitget, a crypto trading platform, shows that January 1 to Jan 10, when the Bitcoin ETF was approved, bitcoin trading volumes grew from $16 billion to $50 billion — a 300 per cent increase. Historically, Bitcoin halvings have resulted in driving bitcoin prices to new all-time highs in the preceding year, Bitget data showed. The first halving occurred in November 2012. Within one year, the price of Bitcoin rose from a high of $13 to $1,152 (in December 2013), and reached its peak one year and one month after the halving. The second halving occurred in July 2016, when the price of Bitcoin rose from a high of $664 to $17,760 (December 2017), reaching its peak one year and five months after the halving. The third halving occurred in May 2020, when the price of Bitcoin rose from a high of $9,734 to $67,549 (April-November 2021), reaching its peak one year and six months after the halving.

The fourth halving will occur in April 2024. It is expected that the price of Bitcoin will rise from the highest point in the US dollar to the US dollar (April-November 2021), and the price is expected to peak one year and five months after the halving. A similar trend has been observed with the previous three halvings with prices increasing over to hit a new bitcoin price all-time highs.

“As of now, there’s no upcoming news that may have a price correlation with Bitcoin except the halving which may provide returns in the medium to long term. It’s also important to take market’s psychological levels, such as bitcoin prices ranging from $50K to previous all-time highs, which may cause larger price retracements,” Ryan Lee, chief analyst at Bitget Research, said.

Bitcoin rose by about 12 per cent in the second week of February 2024. “A series of excellent projects have built on the Bitcoin ecosystem, which has promoted its further development, increasing the demand for its underlying asset bitcoin. This allows more players to participate in the Bitcoin ecosystem increasing its awareness and adoption globally,” Lee said.

Analysts see higher valuations for cryptos coming up.