- Bitcoin jumped to nearly $74,000 on Wednesday.
- The move is retail traders covering their short positions, analysts say.
- Still, others are more bullish and see the move as a testament to Bitcoin’s store of value.
Bitcoin’s price surged 5% in the past 24 hours to just over $72,000 amid a broad market rally that saw gold, oil, and the US dollar surge.
But the real test for the top crypto is unfolding now, analysts say.
“The move brings Bitcoin to the level where previous rallies have stalled, and there is no confirmation yet of a break with follow-through,” Nicolai Søndergaard, research analyst at Nansen, said in an investor note shared with DL News.
Søndergaard’s call comes as Bitcoin’s price has been tightly rangebound between $60,000 and $70,000 over much of the past month. Since the October liquidation event, the crypto industry has been sitting some $2 trillion below its peak despite other assets like stocks and gold charging to new highs.
The move above $72,000 is “driven more by short-covering and retail flow than by conviction positioning,” according to Søndergaard.
He cites a “disconnect” between the recent price action and smart money risk appetite.
“Smart money netflows over the past seven and 30 days show persistent distribution across DeFi and governance tokens, not accumulation into strength,” he said.
Others optimistic
Livio Weng, chief executive of Bitfire, argues that the rally underscores Bitcoin’s structural evolution and demonstrates the top crypto’s value as a safe-haven asset.
As the US and Israel continue to strike hard at Iran, Bitcoin’s price action demonstrates renewed independence from US stocks as investors see it as an independent asset, Weng told DL News.
“The US dollar was once the only option, but as America’s global credibility weakens and a period of dollar softness takes hold, Bitcoin and other cryptocurrencies are increasingly favoured for their security, liquidity, portability and divisibility,” he said.
Weng joins a growing chorus of bullish voices which include Maelstrom’s Arthur Hayes, Bitmine’s Tom Lee, David Brickell and Chris Mills of the London Crypto Club. They all see Bitcoin’s price surging amid the geopolitical chaos.
Indeed, investors poured in $462 million into Bitcoin exchange-traded funds, DefiLlama data shows.
That sets up March to be the first positive month for inflows since October, with $1.4 billion in the first week alone.
To be sure, some analysts advise caution given the uncertainties of the conflict in the Middle East.
“Assuming US and Israeli forces can finish the war in ‘a few weeks’ then I’d expect some bearish sentiment to subside,” Sean Dawson, research head at Derive.xyz, told DL News. “A longer, more protracted war would likely sustain risk-off positioning, increase volatility, and keep downside hedging demand elevated across crypto markets.”
US President Donald Trump has said the war could last five weeks, but that it could go “far longer.”
Crypto market movers
- Bitcoin is up 2.0% over the past 24 hours, trading at $72,597.
- Ethereum is up 2.7% past 24 hours at $2,126.
What we’re reading
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.
