Bitcoin Soars Past $30000 Why Prices Could Keep Going Up

Bitcoin Soars Past $30000 – Bitcoin and other cryptocurrencies rallied Tuesday, with the leading digital asset blowing through a key level to hit its highest point since the crypto crash accelerated last summer. Prices could keep rising in the short-term with bulls back in charge.

The price of Bitcoin has jumped 6% over the past 24 hours to $30,100. The largest crypto had consolidated around $28,000 for weeks before prices took their latest leg higher amid a surge that has defined 2023, with Bitcoin now up 80% since the start of the year in a move that has spurred calls of a new bull market.

“The present price pattern is expected to generate a lot of attention, as well as ‘fear of missing out’ among investors, many of whom have already missed out as the price has regained its significant losses,” said Naeem Aslam, chief investment officer at Zaye Capital Markets. “It is very conceivable that some profit-taking may occur at the present level, but given the momentum it is extremely probable that the price will continue to rise.”

Bitcoin prices haven’t topped $30,000 since a string of collapses rocked the crypto industry last June—ushering in a “crypto winter”—so a return above that psychological level is flashing bullish signals to traders. Bulls are firmly in charge, with the bulk of positions in the highly liquid and speculative Bitcoin futures market betting on a further rise in prices, with many bearish traders holding short positions already wiped out.

Get 2 Years of The Wall Street Journal Print Subscription with daily delivery 6 days a week.

Many Bitcoin futures positions, including shorts that bet on a downward move, are made with borrowed money, and if prices swing the wrong way then traders can be forcibly closed out by their brokers in a process called liquidation. More than $150 million in Bitcoin shorts have been liquidated since Monday, according to data provider Coinglass, and because liquidations typically trigger automatic buy orders that will have added upward pressure into an already-rising market.

There are likely even more bearish traders holding shorts sensitive to higher price levels, so a continued rally could see liquidations continue.

As with much of its recent rally, Bitcoin can thank its sensitivity to macroeconomic forces—and a correlation to stocks, though digital assets are vastly outperforming the Dow Jones Industrial Average and S&P 500 this year.

A major headwind for cryptos last year was the Federal Reserve dramatically raising interest rates to battle decades-high inflation, with higher rates dampening demand for riskier bets like Bitcoin. Prices have bounced back this year amid expectations that the Fed will be more accommodative.

Investors widely are now eyeing inflation data due in the coming days—Wednesday’s consumer price index (CPI) and Thursday’s producer price index (PPI)—to help solidify bets over the Fed’s next move, including a potential pause on rate hikes.

A combination of the macro backdrop and existing momentum in Bitcoin is likely driving the price action, according to James Lavish, managing partner at the Bitcoin Opportunity Fund. Traders are speculating that CPI data could spur a pause from the Fed, boosting risk assets like Bitcoin, Lavish said. That, paired with the symbolic move above $30,000, has the wind in the sails of crypto.

Get a 5-years subscription to the WSJ and Barrons News Available on iOS/Android/PC and Mac. 

“If it pushes through that [$30,000 level] with conviction, a move right into the mid-to-high $30,000s would be likely, forcing short speculators to cover and buy instead. I think some investors are trying to get positioned ahead of that,” Lavish said.

But it’s not all smooth sailing from here. Bitcoin needs to hold gains and consolidate above the next technical levels in order to confirm its bullish streak, and in focus is how the biggest crypto closes out this coming week.

“Bitcoin is pushing out of a consolidation phase,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. “If a breakout is confirmed above $28,100 this Sunday, we would move to a short-term bullish bias and recommend positioning for a test of secondary resistance near $35,900.”

Beyond Bitcoin, Ether — the second-largest crypto—gained 3% to $1,920. Smaller cryptos or altcoins were also buoyant, with Cardano climbing 5% and Polygon +1.12% popping 3%. Memecoins were similarly in the green, with Dogecoin +0.96% advancing 3% and Shiba Inu +1.28% up 2%.