(Kitco News) – Bitcoin is making a comeback as the last month of Q1 wraps up, with the world’s largest cryptocurrency erasing all 2022 losses and breaking out of its tight trading range. Analysts now point to $52,000 as the next resistance level.
Following a weekend rally, Bitcoin was trading at $47,602.99, up 6.7% on the day and up more than 1% on the year. This is a major shift for the cryptocurrency, which has been posting significant losses since the start of 2022.
Ethereum also surged 7% in the last 24 hours, rising to $3,368.19. Meanwhile, Dogecoin, Solana, Cardano were all up more than 9% on the day.
The overall crypto market cap rose to $2.24 trillion on Monday as more investors piled in said BuyUcoin CEO Shivam Thakra.
“Crypto trading volume is up by around 49%. This is a good sign for crypto market recovery and indicates the considerable amount of fund inflows into the crypto economy. We have witnessed some concrete positive developments around crypto, especially the U.K. hinting towards bringing crypto regulation for blockchain-based stablecoins and several other countries fast-tracking their crypto regulations,” Thakra said.
Crypto market movers
The crypto rally also follows positive comments from U.S. Treasury Secretary Janet Yellen. “Crypto has obviously grown by leaps and bounds and it’s now playing a significant role, not really so much in transactions, but in investment decisions of lots of Americans,” Yellen told CNBC on Friday. “There are benefits from crypto, and we recognize that innovation in the payment system can be a healthy thing.”
Bloomberg reported some reports on social media that the recent burst of activity was triggered by whale purchases coming from the Luna Foundation Guard, which was planning to back its token with more than $10 billion in Bitcoin reserves.
On top of that, markets were digesting the news that Russia could consider accepting Bitcoin for its oil and gas exports. Last week, the chair of Russia’s Duma Committee on energy said that the country would be more flexible when it comes to payment options with “friendly” countries.
“We have been proposing to China for a long time to switch to settlements in national currencies for rubles and yuan … With Turkey, it will be lira and rubles,” Pavel Zavalny said at a news conference on Thursday. “You can also trade bitcoins.”
Meanwhile, “unfriendly” countries could be required to pay for gas in Russian rubles or gold, Zavalny added. “If they want to buy, let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us; this is the national currency,” he said.
Bitcoin price levels
If Bitcoin holds the $46,000 level, a move toward $52,000 is in the cards, said GlobalBlock analyst Marcus Sotiriou.
“The $52,000 [level] is the next key resistance. Bitcoin has closed above the short-term holder cost basis (around $46,000) for the first time in months. It is clear that $46,000 is a key pivot for the short-term direction for the market,” Sotiriou said on Monday. “With all macro headwinds being priced in for the short term, we are seeing some long-awaited relief. 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.”
A report from Bespoke Investment Group noted that Bitcoin’s current trading range is in “overbought” territory, but that can be a good thing for the cryptocurrency.
“When it has been similarly overbought in its past (over the last five years), it has averaged significant gains going out one to 12 months,” the report said. “This isn’t normally what you see for the typical stock or ETF, but because Bitcoin has mostly traded higher over the years and really has a lot of momentum trading behind it, overbought levels have yet to become a headwind for this particular space.”
As risk sentiment improves, Bloomberg Intelligence is forecasting for Bitcoin to outperform the stock market, which would potentially break crypto’s dependence on U.S. equities.
“Bitcoin has shown divergent strength in 2022 and on March 28 may be breaching key resistance around its 50-week moving average,” said Bloomberg Intelligence senior commodity strategist Mike McGlone. “Sustaining above $46,300 for the year, but with the Nasdaq 100 Stock Index still down about 10%, may mark an inflection for the benchmark crypto … The fact that crypto is well on its way to becoming the global digital collateral in a world going that way appears to be playing out in 2022.”
However, weighing on all risk-on investments is a more aggressive Federal Reserve, which has signaled that it could raise rates 50 basis points at its upcoming meetings in May and June.
“Every day that the Federal Reserve wakes up to rising asset prices, our take is it becomes more concerned about related inflation and inclined to do something about it. Bitcoin is poised to come out ahead of what may be an overdue mean reversion for risk assets,” McGlone added.
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