Bitcoin Breaks $25,000: Is the Crypto Bull Market Back?

Source: Canva

Since the bear market began, there have been predictions that a bull return would take years. However, the trend shown by Bitcoin, and other cryptocurrencies, reveal that these assets care less about analysts’ forecasts and predictions. But why is this the case?

Well, the signs are not hiding. You would recall that Bitcoin ended 2022 at around $16,000. But imagine, this same coin that was destined for doom in the new year broke $25,000 on 16 February 2022. An assessment of this performance showed that the coin has increased by more than 50%  in value over the last two months. How incredible!

But before you get too excited, let’s remind you that there are some challenges and you may want to consider them before talking about how Bitcoin could blast past its all-time high. So, in this article, we will consider all of the happenings around the crypto market— regulations, expectations, development, and predictions. So, ensure that you read to the end.

Stablecoins Could Stop the Bitcoin Bull

If there has been one part of the crypto ecosystem that has made it relevant till today, it’s stablecoins. These assets which are mostly pegged 1:1 to the dollar are some of the reasons investors can keep holding and not worry about losing their capital.

Now, Bitcoin also gains from these stablecoins because investors can trade the coins against each other and also accumulate Bitcoin with either USDT, BUSD, or USDC. However, a challenge has come up that could affect the broader crypto market and how prices trend in the coming month. During the third week of February, the United States SEC proscribed BUSD as a security because it flouted some rules of the regulators. But the announcement was surprising at the same time because the stablecoin does not fit into the Howey Test. As an asset that no one expects to make profits from, why do you consider it security?

Well, the SEC and the New York Department of Financial Services made the statement that stops the new minting of the stablecoin. Because of this issue, investors who hold BUSD have been moving to another stablecoin, especially USDT.

But the problem is not just with BUSD but Binance. This is because Binance backs the stablecoin and as the world’s largest exchange, happening around it affects the crypto market. Take, for example, the FTX which was not as big as Binance, sent the whole market into the red. So, as time goes on, the Bitcoin price may hold steady as long a regulatory hammer does not fall on Binance. But in the case where it does, the crypto community may have to deal with a repeat of the numerous capitulations in 2022.

That said, Bitcoin had lost hold of the $25,000 at the time of this writing. But the reason may not be because there is bad news around. Usually, a 50% hike in less than 50 days would result in investors taking a profit. So, it is likely that the holders and accumulators when the price was $16,000 have resumed cashing in on gains. To know more about cryptocurrency trading visit Immediate Connect

Metrics Hold the Positives

Despite the challenges, several on-chain metrics seem to support a continuation of the Bitcoin rally. Top of the list is the Unspent Transaction Output (UTXO). If you don’t understand what it measures, we will explain.

The UTXO is essentially the amount of unused Bitcoin in transactions. But the unused parts do not just go into extinction like that. Rather, they form a part of the input into other transactions. So, what is it with the UTXO that has made Bitcoin a noteworthy contender for another price increase?

Well, CryptoQuant data showed that 82% of the UTXO were now in gains. And, the last time such occurred was in June 2022 when there was some recovery from the market crash.

Source: CryptoQuant

With the resurgence, many traders are now back in the market. But Bitcoin is not alone in the fray. Altcoins like Ethereum and Cardano also followed through with immense increases. So, the whole futures and options market is now filled with traders waiting to gain from the market rally.

There has also been an interesting twist to the matter. This is because most of the open contracts on Bitcoin and other cryptocurrencies have the intention to go long. Hence, those who have been bearish have suffered immense liquidations as Bitcoin gained almost 12% in the last seven days.

However, you might still need to be careful. The crypto market has not stopped being a volatile one. So, ensure that you do not get too attached to the excitement and forget that prices could reverse to the downside. But on the brighter side, the crypto market, in the last two months, has shown signs that 2023’s performance could well beat the negatives experienced in the previous year.

That said, let’s take a quick look at Bitcoin’s performance in February. When the month began, Bitcoin did not lose its January Midas touch. In fact, it went as high as $24,000 within the first three days. But as the days progressed, the coin began to decline.

According to CoinMarketCap, the Bitcoin price fell sharply below $22,000 between February 9 and 13. But as Valentine’s present, the coin surged above these levels and hit the $24,000 mark. However, the coin value had decreased as of this writing. So, the euphoria around the market has gone down a little.

Source: CoinMarketCap

Now that we have said a lot about Bitcoin, let’s consider other major cryptocurrencies in the market. So, in the next sections, we will evaluate the recent performance and development around Solana, Ethereum, and Binance Coin.

Ethereum [ETH]

For Ethereum, it has been more of development than enticing price action. If you had no idea, let’s remind you that the blockchain’s validator will begin getting their rewards in March 2022. That is after the second biggest project in the crypto market finishes with the Shanghai upgrade.

But in terms of price, how has ETH performed? Well, in the last 30 days, the crypto market downturn has affected the ETH price. As of this writing, its increase within the said period is only a bit higher than 5%. But after the United States committee announced the Consumer Price Index (CPI) results, Ethereum followed through with an uptrend like Bitcoin.  

However, it was still unsure if the cryptocurrency would still hit $2,000 in the short term. For some people, maintaining the $1,600 region is already a sign that $2,000 is possible. Nonetheless, the market does not really care about sentiment and can trade sideways if its wants.

Binance Coin [BNB]

BNB is the native cryptocurrency of the Binance exchange. So, you would expect that the coin maintains a solid performance since the exchange is the biggest globally, But that factor has only played a little part in the coin value historically. So, none of that has been in play lately.

That said, what is the current BNB condition? Well, at one point, the price slid below $300 after the SEC sued the issuers of BUSD. But BNB again proved that it has solid backing. As of this writing, the price was $307. 

And, this happened just days after there was so much fear and uncertainty about the coin’s progress. All in all, BNB has been able to stay neutral. But a recent report considers the cryptocurrency as very undervalued. So, there is a chance that the price could increase massively in the long run.

Solana [SOL]

For Solana, it’s been a walk away from massive skepticism. You would recall that the cryptocurrency was fingered in the last quarter of 2022 as the FTX exchange went down. Although the exchange founder was not directly involved in the Solana development, he repeatedly showed public support for it. 

So, in turn, SOL holders dumped the token in large numbers. But in recent times, the tokens’ value has been able to get back to double figures even as the firm pushes the Solana mobile into the market.

With respect to price,  Solana exchanged hands at $22.57 at the time of this writing. But its trend in the last 30 days has been different from others. So, instead of a decrease or increase, the current value was the same thirty days before the time when the article was written. Irrespective of the value, many investors still held Solana in high regard, with some calling it the cryptocurrency of the future.

That said, we cannot guarantee that Solana would bring your profits in the long term as the article is purely informational. So, if the cryptocurrency attracts you, do well to research the fundamentals.

Final Words

In conclusion, you may find out that there is a lot of excitement in the crypto market currently. And, this has led to the fear and greed index trending towards more greed. So, in this case, you may need to be careful. At the same time, that is not to say that prices won’t increase.

But as we have mentioned before, the sector is faced with many challenges— from regulation to some firms’ bankruptcy. So, ensure that you do your own research so you do not end up as exit liquidity for investors with deep pockets.

In addition, Solana, BNB, and Ethereum are not the only cryptocurrencies following the Bitcoin trend. You can take a quick visit to CoinGecko or CoinMarketCap to view the list of trending coins. Again, that they are trending does not mean that they are a good buy. Invest in education and research by doing your own due diligence.