Bitcoin Returns Above USD 40K, Ethereum Nears USD 3K

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Bitcoin (BTC) rallied to a USD 40,000 high for the first time in 2 weeks. Ethereum (ETH) was close to the USD 3000 level.

BTC trades at USD 44,526 at 17:00 UTC and has risen almost 10% per day and 9% per week. ETH climbed 12% to USD 2,950. It is also up 22% in one week.

Other coins from the Top 10 Club are up 5%-13% per day.

reported today that some analysts believe BTC and ETH are nearing bottom or may soon bottom – with cautionary words about premature bullishness.

“The current rise was due to significant rangebound price action, which saw volumes drying out and shorts growing. In an email comment, Joe DiPasquale (CEO of crypto hedge fund BitBull Capital) stated that when the market is strongly leaning towards one side of a trade (too short or too long), the price can move in order to offset that weight and squeeze positions.

He said that bitcoin and risk-on-equities have been positively correlated in the past two years but not overall.

“This week, the Nasdaq’s and the S&P 500’s have returned to where they were before Jan 21st, when BTC was sold for USD 43k to USD35k. We expected BTC to return to USD 40-41k, given the partial recovery of equities, said DiPasquale.

This jump is also due to positive developments in stock markets.

“The fact that AMZN’s earnings went in the direction of AAPL and MSFT — and not FB — has given investors greater confidence to reengage on risk-on trading,” Matt Maley (Chief Market Strategist at Miller Tabak + Co.), said to Bloomberg. Today was also announced that the US economy has created more jobs than it expected. The nonfarm payrolls grew by 467,000 jobs in January, while economists polled at Reuters predicted 150,000 new jobs for January.
Hayden Hughes, CEO of Alpha Impact a trading social media platform, said that although there were concerns regarding accelerating monetary policies, many capital markets now feel that a 50-basis point rate increase is price in considering recent movements in the equity markets.

Will Hamilton, Head, Trading and Research, Trovio Capital Management stated that traders continue to place bets on further downside during this period of consolidation in the derivatives markets.

He stated that Futures funding has been in a prolonged period of negative volatility, which indicates a slight short bias in perpetuals markets, while the bitcoin put/call ratio reached 58%, a level last seen during the FY21 May-July bear, indicating a strong desire to protect downside risks.”

He believes that further accumulation can be seen from an on-chain perspective as existing and new investors increase their holdings.

Hamilton stated that the number of bitcoin wallets with >0 zero balances has reached an all-time high at 40.12m in this pullback, while total exchange reserves have fallen to multi-year lows and now account for 13.27% of total circulating supply.

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