Can Bitcoin (BTC) Break Above $45K for Return to Bull Market
After weeks hovering under the $40K mark, Bitcoin (BTC) looked ready to attack bearish positions. BTC regained strength, touching $44,000 with ease on Thursday.
The rallys set expectations for BTC to move above $45,000 as a signal for renewing the bull market.
BTC now heads into the final stretch of the first quarter, with the challenge of turning the monthly candle further into the green. But in the short term, BTC may also face resistance levels and even retrace to lower prices.
BTC rallied to $44,138.54 ahead of the weekend, on an improved bullish attitude. The price move caused predominant short liquidations on OKEx, Binance and FTX, liquidating $32.47M worth of BTC.
The BTC rally spread to other assets, helping lift Ethereum (ETH) above $3,100. Most major coins and tokens reflected nominal or real gains. The BTC market cap dominance is just under 42%, giving way to altcoins and ETH.
What Drives BTC Prices
During the latest period of stagnation, BTC spent weeks with temporary dips to $35,000. During that time, once again coins were taken off exchanges, leaving actual BTC availability on the low side.
Instead, BTC was driven by derivative product trading, hinging on the ever-growing supply of stablecoins. At the same time, the latest period of sideways movement was used by new buyers, while some of the older ones held without selling.
BTC still flows out of exchanges, while USDT moves onto the markets, potentially lifting all assets.
The recent rally also follows the improved sentiment, breaking with some of the bearish expectations for a slide down to $29,000.
BTC remains volatile, and with derivative positions in conflict possibly causing new price swings. But for now, BTC easily crosses the $44K barrier, preparing to test higher resistance levels.
Japan Spreads BTC Trading to All Exchanges
Japan has always been a pioneer in BTC trading, and at one point the BTC/JPY trading pair was responsible for as much as 60% of all trades. Japanese crypto exchanges, however, have gone through rough periods, not even counting the Mt. Gox disaster.
Japan is extremely conservative, requiring significant reporting and transparency from crypto exchanges. Anonymous coins have been delisted from most markets. But BTC trading has been preserved over the years, on conditional permissions.
Japan also practically expelled the Binance exchange due to failures to report sufficient information, pushing the market operator to seek domicile in Malta.
Currently, the BTC/JPY pair takes up around 3.5% of all activity, while USDT pairings take up more than 57%.
BTC Miners Compete for Remaining 2M Coins
The BTC hashrate remains close to its absolute peak, currently above 208 EH/s. More efficient machines and favorable market prices make BTC highly attractive to miners.
This is also one of the reasons why Ethereum Classic (ETC) is still attractive. Relatively low mining difficulty and a growing price are a sweet spot for miners.
BTC is also reaching the end of available coins to be mined. With still more than two years until the next halving, the current coin production will soon reach the 19M mark.
Less than 10% of all BTC remains to be mined, with additional scarcity from lost coins and long-term holders. The remaining 2M tokens represent the last chance for larger projects to acquire assets.
BTC stashes belonging to big buyers recently showed a trend to hold more than 100K coins. At this rate, the remaining coins can fuel about 10 projects the size of Terra (LUNA). This does not take into account potential retail demand, making an even more bullish case for holding the coins.
The plans of Terra may be even more ambitious, stretching to $3B worth of BTC, at least by current prices. With more demand for collateral, BTC looks like one of the more respectable assets to hold.
Gains Spill Over to Altcoins
Gains spilled over to the recently active altcoins. Cardano (ADA) added another 10% to $1.17. Solana (SOL) moved above $100, with Avalanche (AVAX) still under $90 and LUNA stabilizing around $93.
But the big outlier was Axie Infinity Shards (AXS). The token added more than 22% and jumped to above $68 after a long period of stagnation.
AXS jumped ahead of a long-awaited game update for Axie Infinity. Despite falling from its peak above $160, the game is still one of the most widely adopted blockchain games. Axie Infinity also worked as one of the avenues of crypto adoption for a wider pool of owners. Through easy gameplay, Axie Infinity has offered small but predictable daily gains in SLP tokens.
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