Bitcoin rose above the $79,000 level on Wednesday, reaching its highest value since early February. While the long-awaited bullish attempt gained strength, the risk appetite in the market increased significantly.
New highs in crypto markets
The largest cryptocurrency stood out with a 4.5 percent increase in the last 24 hours. This movement in Bitcoin also led to a rapid rise in important altcoins such as Ether, BNB, Solana and XRP. The CoinDesk 20 Index, which tracks broad market performance, also rose 3.5 percent.
Stocks linked to crypto assets are seeing significant gains. Strategy, the company with the most Bitcoin on its balance sheet, experienced a 10 percent jump, while fixedcoin issuer Circle Internet gained 9 percent and crypto exchange Coinbase gained 6 percent. Bitcoin miners MARA Holdings and Riot Platforms rose between 6 and 7 percent.
Positive atmosphere in the markets
The macroeconomic environment is also supporting the crypto rally. While the S&P 500 index in the USA increased by 0.9 percent, Nasdaq increased by 1.3 percent and reached new record levels. It is noteworthy that an environment has emerged where risky assets are in demand.
This positive atmosphere in the markets became evident after US President Donald Trump’s statements on Tuesday evening. Trump stated that he would extend the ceasefire with Iran and maintain the naval blockade around the Strait of Hormuz. Uncertainty regarding peace talks still continues.
Paul Howard, one of Wincent managers, stated that Bitcoin’s near-term price movement depends especially on macroeconomic and geopolitical developments. Howard said $72,000 is an important support level, but the rise could be limited by profit taking in the $79,000-$80,000 band.
Short term traders, new entries
Although macro risks continue, positions formed in derivative markets may support the rise. K33 Research research director Vetle Lunde stated that seven-day financing rates in perpetual swap transactions have fallen to their lowest levels in the last three years, and investors are taking predominantly bearish positions. The high amount of open positions in the same period indicates that there are new leverage inflows to the market.
With increasing leverage and negative funding rates, the increase in the number of short selling investors is noteworthy. Lunde pointed out that this situation may lead to a sharp short position squeeze in the short term.
“The potential for a strong breakout in Bitcoin is still high. Intensified short positions create a serious impetus for the upward movement,” Lunde evaluated.
The $79,000-$80,000 range also coincides with the buying cost for short-term investors for Bitcoin. This group is generally more sensitive to price fluctuations and can sell quickly.
Currently, Bitcoin appears to be testing this threshold. Breaking through the zone could increase confidence behind the rally. However, failure to maintain this level may cause short-term investors and those who want to take their profits to make new sales.
