Bitcoin has regained the $110,000 mark for the second consecutive day, possibly propelled by significant gains in altcoins.
After a 0.9% increase over the last 24 hours, Bitcoin was trading above $110,000 shortly after the closing of U.S. stock markets on Tuesday. The CoinDesk 20, an index of the top 20 cryptocurrencies by market capitalization, has risen 3.3% during the same timeframe, largely due to ether, solana, and chainlink, which all surged by 5%-7%.
Exceptional performances were noted from uniswap and aave, which saw increases of 24% and 13%, respectively. This surge was driven by optimistic comments regarding DeFi from a prominent regulatory authority.
The equities market remained relatively stable, with most crypto stocks showing little movement. A notable exception is a firm that aims to follow a Bitcoin acquisition strategy, experiencing a 10% drop today, leading to a price below the value of Bitcoin on its balance sheet.
Despite today’s gains, overall sentiment in the crypto markets remains cautious.
“Funding rates and other leverage indicators suggest a persistent cautious sentiment throughout the market,” a research head stated. “The general risk appetite is notably weak, considering Bitcoin’s proximity to previous all-time highs.”
Recent data on Bitcoin ETFs highlight a similar sentiment. The current ETF holds assets equivalent to 52,435 BTC, significantly lower than its peak of 76,755 BTC in December, with inflows remaining subdued. This defensive positioning indicates potential for a “healthy rally” in Bitcoin.
However, not everyone is convinced that this price movement signifies the beginning of a strong upward trend.
“Do I believe this breakout will last? Likely not,” noted a senior expert. “It seems more like the continuation of a volatility cycle, where we might see temporary rallies followed by sharp corrections triggered by negative news or changes in sentiment.”
In the current market, experienced traders are favored, as they can navigate the volatility-driven landscape. Key support levels for Bitcoin are seen at $105,000 and $100,000, which could be revisited if selling pressure mounts.