Crypto markets followed moves in bitcoin amid reports of multimillion-dollar purchases of the asset by a major blockchain entity.Read MoreFeedzy
Bitcoin (BTC) held over the $47,000 mark during the European hours on Monday following a surge from Sunday’s $44,700 level, leading to a broader recovery and a 5.4% addition or $100 billion to the overall capitalization of the crypto markets, in the past 24 hours.
Some funds attributed bitcoin’s surge to demand generated by Luna Foundation Guard (LFG). The LFG intends to accumulate $3 billion in bitcoin as a reserve for TerraUSD (UST), a stablecoin pegged to the U.S. dollar, and has purchased $125 million worth of the asset multiple times in the past week.
Major cryptocurrencies displayed gains after over two weeks of staying flat. Solana’s SOL jumped as much as 14%, with similar gains seen on Shiba Inu’s SHIB and Polkadot’s DOT tokens. SOL set monthly highs of $110, data show, while SHIB was in touching distance of its monthly highs of $0.00002788.
A jump in SOL prices made it costly for traders betting against higher prices of the asset. Data show nearly $30 million in liquidations occurred on SOL-tracked futures. Bitcoin futures racked up $172 million in losses, the most among all cryptocurrencies, while ether futures followed with $139 million.
The losses added to nearly $455 million in overall liquidations in the crypto market. Liquidation occurs when a trader has insufficient funds to keep a leveraged trade open.
Analysts cautioned against euphoric sentiment for bitcoin as sentiment indicators suggested a correction could be on the cards.
“The Crypto Fear and Greed index has reached 60 which is classified as Greed – the last time it reached this level Bitcoin was around $60,000,” explained Marcus Sotiriou, analyst at crypto broker GlobalBlock, in an email to CoinDesk. The fear and greed index calculates investor sentiment, with “greed” readings leading to a high probability of an imminent correction and “fear” readings preceding a period of the uptrend.
But Sotiriou expects prices to move much higher in the coming days. “Bitcoin is facing heavy resistance, but if it is able to hold above the $46,000 level (which roughly marks the yearly open) for several days, I expect a move to $52,000, which is the next key resistance,” he said in the email.
Several other analysts shared similar price targets for bitcoin.
“A sustenance of the current growth track can push the price of BTC above $50,000 before the end of the week and between the $50,000 to $55,000 range before mid-April,” said Alexander Mamasidikov, co-founder of mobile digital bank MinePlex, in a Telegram message.
Vasja Zupan, president of Matrix Exchange, seconded that sentiment. “It could be a sign that markets are beginning to recover from the initial shock of the Ukraine war,” he said in a Telegram message. “Bitcoin will disconnect from the tech stock markets and serve as a hedge in an inflationary environment as digital gold. The first goal is $50,000.”
Crypto entrepreneurs like Zupan are back to much higher estimates of bitcoin’s future prices. “I wouldn’t be surprised if we hit 100k before the end of the year, regardless of the geopolitical situation,” he said.
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