and other cryptocurrencies moved higher on Friday, boosted by the return of risk appetite among investors and a week of accelerating institutional adoption.
Bitcoin, the leading cryptocurrency, was up almost 5% over the past 24 hours to near $45,000, around the highest level seen since the beginning of the year.
“Bitcoin is on the verge of a major breakout as the price is on course to test the $45k, which has been a strong resistance since mid-January,” said Yuya Hasegawa, an analyst at Japanese crypto exchange Bitbank.
also surged. The token underpinning the Ethereum blockchain network rose almost 6% to near $3,200, trading at the highest levels since mid-February.
Similar price action was seen among some smaller cryptocurrencies, or “altcoins,” with
both up around 5%.
—called that because they are mostly based on internet jokes rather than significant blockchain projects—were also enjoying a boost. Dogecoin notched gains of 2% and shiba inu was 4% in the green.
Analysts noted that bitcoin’s rise was matched by an accompanying rise in the open interest on derivatives exchanges, which indicates higher liquidity in the futures market and can be supportive of the price trend.
Hasegawa at Bitbank also said that the funding rate for continuous-contract futures “plunged” into negative territory, signaling that significant positions have been accumulated by short sellers.
“The accumulated short positions could result in a cascade of short covering in case of breakout, which, in turn, could push up the price significantly,” Hasegawa said.
“The upper price target in the short term will be the area between $48k and the $50k psychological level. If the price fails to test the $45k resistance, it could go into a short-term correction phase and could decline to $42k,” the analyst noted.
Moves in the crypto market largely paralleled what was seen on Wall Street. Stocks were rallying Friday as oil prices eased back from eye-watering highs, and investors remained optimistic about diplomatic developments in the Russia-Ukraine war.
In theory, Bitcoin and its peers should trade independently from mainstream financial markets. However, cryptos have shown themselves this year to be in part correlated with other risk-sensitive assets, like stocks.
“A broad risk-on rally on Wall Street is also helping send Bitcoin higher to the upper-boundaries of its recent $37,000 to $45,000 trading range,” said Edward Moya, an analyst at broker Oanda.
The Friday rally comes after a week in which cryptocurrencies enjoyed a spurt of attention from the mainstream financial world.
Write to Jack Denton at [email protected]