CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Crypto news: BTC hits $45K, but can the rally continue?

By Daniela Ešnerová

04:10, 8 February 2022

Bitcoin (BTC) coin with lines representing market movements.
The oldest cryptocurrency added 18% in the past four days – Photo: Shutterstock

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?

3588.11
Bullish
or
Bearish
Vote to see Traders sentiment!

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.

DOGE/USD

0.16 Price
+6.150% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BCH/USD

505.35 Price
+4.180% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50

XRP/USD

0.54 Price
+4.370% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

69,440.00 Price
+5.050% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

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:

“Metal coins were replaced by paper money, and then transactions became cashless. Digital financial assets are just the next stage.”

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:
"Crypto assets are a maturing asset class. Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to crypto assets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving crypto assets. This investment reflects our belief that institutional adoption of crypto assets and blockchain technology will continue to grow and become a regular part of the asset mix."

Top coins by market capitalisation

As of 08:00 GMT: 

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.

Markets in this article

BNB/USD
Binance Coin / USD
597.92 USD
15.13 +2.630%
BTC/USD
Bitcoin / USD
69440.00 USD
3344.1 +5.050%
ETH/USD
Ethereum / USD
3588.11 USD
429.27 +13.960%
SHIB/USD
Shiba Inu / USD
0.00002571 USD
0.00000117 +4.900%
US500
US 500
5310.0 USD
4.6 +0.090%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 610,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading