Cryptocurrencies started the week with a strong rally, bouncing back from recent losses as bitcoin (BTC) once again traded above its 2021 peak.
Bitcoin (BTC) surged past $70,000 on Monday during U.S. trading hours, surpassing the level for the first time in 10 days and gaining more than 7% over the past 24 hours. Ethereum’s ether (ETH) was up 6% during the same period, while tokens for major layer-1 blockchains Solana (SOL) and Avalanche advanced more than 10%.
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The rally extended to virtually all digital assets, with all constituents of the broad-market CoinDesk 20 Index (CD20) being in the green and the gauge up 6.1% for the day.
The sudden resurgence liquidated $195 million of leveraged derivatives positions across all crypto assets, some $129 million of them being short positions seeking to profit from lower prices, CoinGlass data shows. Bitcoin short liquidations reached $53 million, less than the average daily figure of the recent period.
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The relatively modest amount of short liquidations despite the price surge suggests there weren’t many market participants using leverage to bet on continued weakness.
Bitcoin targets $83,000 and higher after breaking out from consolidation pattern
Monday’s surge signaled a potential end of the recent correction for crypto markets, which saw BTC drop below $61,000 last week from record prices above $73,000, coupled with tepid inflows to new U.S.-listed spot bitcoin ETFs and increased selling of Grayscale’s GBTC fund.
Bitcoin could target new all-time highs after breaking out to the upside from its consolidation pattern, analytics firm 10x Research said in a Monday report. Based on a symmetrical triangle formation, a chart pattern in technical analysis, the breakout could foreshadow a $15,000 to $20,000 price increase for bitcoin’s next move from around the $63,000 level, the report said. That would drive BTC as high as $83,000.
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Another critical level that BTC cleared today was the 2021 peak at $68,000, given that when previous market cycle tops were “retested and broken once more, BTC has tended to put in significant rallies,” said Markus Thielen, founder of 10x.
The uptrend is supported by several central banks tilting toward dovish stances, which should benefit bitcoin, the report said.
“The Fed signaled that they are willing to accept higher inflation for longer and are eager to slow down quantitative tightening,” Thielen said. “The Bank of Japan and the Swiss National Bank also surprised on the dovish side.”
The report highlighted that bitcoin tends to perform well during U.S. election years – and 2024 is one – historically advancing 100%-200%, which also supports the case for higher prices later this year.
“Our upside targets of $83,000 and $102,000 could slowly be at play,” Thielen said.
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