Bitcoin and other cryptocurrencies remained relatively stable on Tuesday, maintaining their gains while stocks experienced a decline. Despite this, analysts believe that there is still potential for Bitcoin to rise even further.
Bitcoin's Price Movement
Over the past 24 hours, the price of Bitcoin rose by less than 1% to reach $41,750. Although it fell short of its peak above $42,000 on Monday, which marked its highest level in 20 months since the bear market slump, Bitcoin has seen a notable rally. Since mid-October, the largest cryptocurrency has surged by over 50%, including a 10% increase in the past five days alone. This surge has ended a prolonged period of relative stability and has raised speculation of a new bull market in the crypto industry.
Alex Kuptsikevich, an analyst at broker FxPro, suggests that a slight correction may occur before attracting new buyers. He believes that a broader move of profit-taking could potentially bring the price back to $40,000.
Drivers of Bitcoin's Rise
The optimism surrounding the approval of the first spot Bitcoin exchange-traded fund (ETF) by U.S. regulators has been a significant driving factor behind the rising Bitcoin prices. The potential approval is expected to spark fresh interest among investors in cryptocurrencies. Additionally, an improved macroeconomic outlook, coupled with expectations of multiple interest rate cuts by the Federal Reserve next year, has also contributed to the rise in Bitcoin prices.
Momentum and Resistance Levels
Bitcoin has recently outperformed traditional stock markets such as the Dow Jones Industrial Average and the S&P 500. Analysts believe that there is continued momentum behind Bitcoin's latest surge and anticipate further gains in the future. Katie Stockton, managing partner at Fairlead Strategies, stated that Bitcoin has successfully surpassed another resistance level near $38,000, which indicates short-term bullish development. She further adds that if the next resistance level around $42,200 is overcome, the next target would be a secondary resistance level near $48,600.
Ether, the second-largest cryptocurrency, experienced a marginal decline of less than 1%, but it continued to hover above $2,200, reaching a 20-month high. On the other hand, smaller cryptocurrencies, including Cardano and Polygon, remained relatively unchanged. Among the meme coins, Dogecoin saw a 2% increase, while Shiba Inu jumped by 3%.