Crypto news: BTC hits $45K, but can the rally continue?
04:10, 8 February 2022
Bitcoin (BTC) has broken through to hit $45,000 (£33,300) in valuation for the first time in over a month in early morning trade in London. The oldest cryptocurrency added 18% in just the past four days, marking the longest rally since September.
Meanwhile, trader sentiment appears to be impriving after taking a beating during January, as suggested by market analysis findings on the Crypto Fear & Greed Index.
The Crypto Fear & Greed index, which measures the mood in the market based on volatility, market volume, social media, trends and dominance, showed the sentiment as netrual, as well as being the highest in January, after having signaled ‘extreme fear’ for most of the beginning of 2022.
The rally
BTC got a pump on Friday as the better-than-expected US employment numbers signalled a healthy economy, sparking positive reaction from the markets. But while traditional markets were closed, the cryptocurrency market continued to soar during the weekend, which had the effect of diverting BTC from its recent correlation with S&P 500.
Bitcoin and the rest of the cryptocurrency market kept rising on Monday, when a flurry of crypto-positive news – including increasing mass adoption of crypto among corporations – continued to spread.
“It is a mainly positive sign that the S&P 500 didn’t really have anything of a special Monday – it was mainly break even while bitcoin was able to continue climbing during US market open hours,” said Brian Quinlivan, director of marketing at crypto analytics firm Santiment, in a YouTube video.
“That’s a good sign, and could indicate that the correlation between the two is finally starting to ease up,” he added.
What is your sentiment on ETH/USD?
Negative funding rate
During the four-day market rally, $229.2m short positions were liquidated in the perpetual markets, according to a tweet from data analytics firm CryptoQuant.
As the tweet reveals, some analysts have pointed out that BTC funding rates are currently negative. Funding rates are a fee that one side of the perpetual contract pays the other side to keep the position open. A negative funding rate indicates that short sellers are paying the long sellers.
“Right now, we are seeing another bump down of negativity, where people aren’t quite believing that this rise can last,” Quinlivan said, commenting on the current bitcoin funding rate.
“And that’s a good thing – people are shorting right now. The shorts are outpacing the longs, indicating they don’t believe that this rise can last and that there is going to be some inevitable letdown.”
Quinlivan added: “Historically, we have seen a long stretch of shorts like this where prices can continue to fluctuate and even go down a little further, but it’s generally a matter of time before lot of these shorts get liquidated, or they just give up on the shorts themselves.
“But either way, [it is a] better time than average right now if you are long-selling, considering the amount of potential liquidations that can occur and then cause a lovely little rocket emoji.”
Quote of the day
Billionaire Vladimir Potanin – the second-wealthiest man in Russia and 10th richest person in the world, with an estimated net worth of $87bn, told Bloomberg in an interview that:
Other crypto news
- Nasdaq lists Valkyrie Bitcoin Miners exchange-traded fund (ETF). The ETF will have at least 80% exposure to securities of companies that ‘derive at least 50% of their revenue or profits’ from BTC mining or providing equipment related to mining.
- KPMG Canada has added BTC and ethereum (ETH) to its corporate balance sheet.
Commenting on the news, billionaire Mike Novogratz – former hedge fund manager, crypto advocate and now CEO of Galaxy Investment Partners, which focuses on crypto investments – tweeted: “This is Big News. A few years back it was pulling teeth to even get a Big 4 firm to talk to a crypto company. Now they are part of the community. Onward and upward.”
Benjie Thomas, KPMG’s Canadian managing partner for advisory services, likewise commented:
Top coins by market capitalisation
As of 08:00 GMT:
- Bitcoin (BTC) jumped 5.26% to $44,855.76.
- Ether (ETH) added 3.05% to $3,176.34.
- Binance coin (BNB) was up 3.09% and trading at $438.86.
Winners and losers
- Shiba inu (SHIB) and ripple (XRP) led the chart of the biggest daily gainers among the top 50 virtual tokens, adding 18.36% and 11.64% respectively.
- The unus sed leo (LEO) token has lost 7.33% in the past 24 hours.
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