Monday, 15 April 2024

Crypto News

As Bitcoin nears $25K, questions about rally’s sustainability remain

As Bitcoin nears $25K, questions about rally’s sustainability remain

It is no secret that the global economy has continued to weaken over the course of the past year. To this point, on Jan. 19, the United States government hit its “debt ceiling,” i.e. the total sum of money that the U.S. Treasury can borrow to fund its ongoing federal operations, leading to renewed concerns that more financial pain and the economic slowdown could be incoming.

Similarly, on the other side of the Atlantic, the United Kingdom has been struggling as well. This is made evident by the fact the number of company insolvencies registered in 2022 hit 22,109 — a 57% spike from the year prior and its highest rate since 2009. Not only that, the International Monetary Fund recently released a report suggesting that the United Kingdom would be the only G-7 nation to face a recession this year.

However, amid all this devastation, the crypto market seems to have caught some wind in its sail over the past month. In January, the total capitalization of this sector surged from $828 billion to approximately $1.1 trillion, signaling a rise of nearly 32%. Focusing on Bitcoin (BTC) particularly, on Jan. 30, the cryptocurrency rose to $24,000 after seemingly having stagnated around the $16,500 range for the better half of November and December.

In fact, the asset’s share of the market’s total cap rose as high as 44.82% recently, its highest such level since June last year. As a quick remedy, this number usually rises so steeply only when investors start limiting their exposure to altcoins and pouring their capital back into BTC.

Is $25,000 the next stop for Bitcoin?

After successfully defending a price target of $22,500 since Jan. 20, Bitcoin is currently showcasing a 30-day profit ratio of around 40%. This spike has been mirrored by similar surges in the stock market, which rallied recently after China eased its COVID-19 restrictions after three long years of strict pandemic controls.

30-day Bitcoin price chart. Source: CoinGecko

Furthermore, as per data made available by financial services company Matrixport, American institutional investors currently account for 85% of all recent Bitcoin accrual activities, suggesting that mainstream players are not ready to give up on the digital asset market. Thus, to gain a better understanding of where the industry may be headed in the near term, Cointelegraph reached out to Timothy T. Shan, chief operating officer for Avalanche-based decentralized exchange Dexalot. In his view:

“I think the recent rally in Bitcoin…

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