The price of Bitcoin extended its winning streak to a seventh session on Thursday. It zoomed past the $56000 level and briefly hovered near the $58000 level on Thursday. The digital asset finally closed at $57,500-level as of 4 pm ET, adding nearly 2 percent in 24 hours.
The momentum was initiated by a government report showing a slower than expected inflation rate in February. The rally was further fuelled by Biden’s signing of the $1.9 trillion pandemic relief bill into law. Financial markets around the world are in high spirits, and Bitcoin is following the lead. Its market cap has also bounced back over $1 trillion again.
The cryptocurrency has revived from its February-end rout after crossing the $58000 mark on February 21.
“Risk sentiment in global markets has been very upbeat in the aftermath of yesterday’s US inflation data,” Joel Kruger, a cryptocurrency strategist, told CoinDesk.
However, a low trading volume in major crypto exchanges has analysts worried. According to a report by CoinDesk, trading volume on eight major spot cryptocurrency exchanges has been relatively flat for over two weeks.
Since the price touched the $45000 level in February, there aren’t many sellers in the market. There aren’t many buyers either. Kruger says this creates an upward pressure. He also warned investors to stay cautious in the short-term.
Fed Reserve Chairman Jerome Powell is expected to clarify his latest stand on monetary policy, and those announcements are significant for risk assets in general, including Bitcoin.
Bitcoin has risen over seven-fold in the past year as institutional rose to record levels. Some analysts are now comparing it with gold – a haven and a hedge against inflation, and others argue it is a giant bubble on its way to bursting like it did in 2017-18.
The parabolic rise in interest and growth of Bitcoin over the last months has increased the total cryptocurrency market value to $1 trillion again.
Meanwhile, Ether, the second-largest cryptocurrency, continues to show bearish tendencies, while other altcoins don’t look too cheerful either. Ether was 11 percent down from its all-time high on Thursday.