A powerful rally began in the cryptocurrency market last night and continues today. Over the past 24 hours, Bitcoin has risen by approximately 1.91%, surpassing the $72,000 mark, and altcoins have followed suit.
The largest altcoin, Ethereum, demonstrated a rise of approximately 20%, while other major altcoins like Solana and XRP also showed double-digit gains.
According to Bloomberg, the price increase is driven by heightened expectations for liquidity due to events in the US Treasury bond market and positive statements from Washington regarding cryptocurrencies, which are boosting investor risk appetite.
According to Bloomberg, improved market sentiment, supported by expectations of a US crypto-friendly policy and increased Treasury liquidity, has contributed to the rise in the digital asset market.
Bloomberg reported that Bitcoin experienced a sharp rally after the closing of short positions, recording its largest daily gain since March.
This Does Not Mean a Trend Change!
While discussions continue on whether the rally in Bitcoin and altcoins will persist, the crypto analytics company Glassnode has offered a cautious assessment.
In its latest analysis, Glassnode argued that Bitcoin's recent recovery is more of a short-term uptrend rather than a trend reversal.
According to Glassnode, Bitcoin's recent recovery does not yet indicate the start of a new uptrend. Glassnode notes that BTC is currently below both the short-term investor cost basis of approximately $68,500 and the average market price of $75,800, asserting that the market remains weak.
On the other hand, relative unrealized losses have increased to 25% from the cycle peak, but this is significantly lower than the 60%+ observed in previous cycles. Additionally, the 90-day Realized Profit/Loss Ratio is 0.75, still not falling below the level of 0.5 historically observed during seller exhaustion phases.
In conclusion, Glassnode noted that demand for perpetual futures contracts has turned positive, and ETF inflows have stabilized, but the Coinbase premium remains negative, indicating that demand for spot contracts in the US has not significantly recovered.
In the context of this situation, Glassnode's assessment suggests that for a more convincing confirmation of Bitcoin entering an uptrend, a sustained break above critical cost levels and strengthening spot demand are necessary.
*This is not investment advice.
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