A strong rally began in the cryptocurrency market last night and continues today. Bitcoin has gained approximately 1.91% in the last 24 hours, surpassing the $72,000 level, and altcoins have followed suit.
Ethereum, the largest altcoin, experienced a surge of approximately 20%, while other major altcoins like Solana and XRP also saw double-digit gains.
According to Bloomberg, the rally is driven by increased liquidity expectations due to developments in the US Treasury market and crypto-friendly messages from Washington boosting investor risk appetite.
According to Bloomberg, improved market sentiment, supported by expectations of crypto-friendly US policies and increased Treasury liquidity, has driven the digital asset market higher.
Bloomberg reported that BTC experienced a rapid rise as short positions were closed, recording its biggest daily gain since March.
It Doesn’t Mean a Trend Change!
While the question of whether the rise in Bitcoin and altcoins will continue is being monitored, a cautious assessment has come from the crypto analytics company Glassnode.
In its latest analysis, Glassnode argued that the recent recovery in Bitcoin was more of a short-term uptrend than a trend reversal.
According to Glassnode, Bitcoin’s recent recovery doesn’t yet indicate the start of a new uptrend. Glassnode points out that BTC is currently below both the short-term investor cost base of approximately $68,500 and the realized market average price of $75,800, arguing that the market remains weak.
On the other hand, relative unrealized losses have risen to 25% from the cycle peak, but this is well below the 60% or more seen in previous cycles. Furthermore, the 90-day realized profit/loss ratio is at 0.75, still not falling below the 0.5 level historically seen during seller exhaustion phases.
Glassnode concluded by noting that demand for perpetual futures contracts has turned positive and ETF inflows have stabilized, but Coinbase’s premium remains negative, indicating that US spot demand has not recovered significantly.
In context, Glassnode’s assessment suggests that a sustained move above critical cost levels and stronger spot demand are needed to more strongly confirm that Bitcoin has entered an uptrend.
*This is not investment advice.
