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Bitcoin Records Biggest Monthly Gain Since 2020, New ATH in Sight

Alex Thorn from Galaxy mentioned that the demand for Bitcoin through U.S.-listed spot Bitcoin ETFs is facing limited supply, primarily because long-term holders are reluctant to sell.

Fri, 01 Mar 2024, 09:22 am UTC

Bitcoin is set to conclude its strongest month since December 2020, with analysts suggesting that this bull market still has room to grow despite prices nearing all-time highs.

February's Surge

The leading cryptocurrency by market capitalization has surged by an impressive 44% throughout February. This surge saw Bitcoin break through key resistance levels, surpassing $50,000 and $60,000 for the first time in years and reaching a peak of $64,000 on Wednesday.

The rally came after a brief pullback below $40,000 following the launch of spot bitcoin exchange-traded funds (ETFs) in the U.S. in late January.

Ending the Month Strong

Bitcoin is poised to end the month at its highest price ever, needing to surpass $61,357 by midnight UTC to achieve this milestone. At present, BTC is trading at around $61,200.

February's crypto rally was not limited to Bitcoin alone, with the CoinDesk 20 Index (CD20) experiencing a more than 40% increase. Tokens like Uniswap's governance token (UNI), Filecoin's FIL, and dogecoin (DOGE) were among the top performers, surpassing Bitcoin's gains.

Analysts Outlook

Despite Bitcoin's price nearing its all-time high, analysts believe there is room for further upside.

According to Coin Desk, Alex Thorn, head of firmwide research at Galaxy, views the recent launch of U.S. spot Bitcoin ETFs as a "game changer," providing steady demand for BTC. Additionally, approximately 75% of Bitcoin's supply is held by long-term investors who have shown reluctance to sell at current price levels.

On-chain Metrics and Caution

On-chain transaction volume and retail interest in crypto remain below levels seen during previous peaks, according to IntoTheBlock analysts.

A Coinpedia report states that the bullish sentiment drives the BTC price amid highly optimistic market conditions. After the notable bull run in 2021, Bitcoin garnered considerable attention and witnessed a surge in adoption rates.

Consequently, investors were keen to acquire tokens at reduced prices. When BTC's price experienced a drop from $25,000 to lows below $16,000, followed by a recovery and return to the $28,000 level, trading volume reached unprecedented levels in history.

While some predict that Bitcoin's current uptrend is just the beginning, caution is advised against rushing into the market at these elevated levels. Swissblock analysts recommend waiting for short-term pullbacks to identify buying opportunities rather than chasing the market.

Photo: Vladimir Solomianyi/Unsplash

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