Bitcoin, the largest cryptocurrency by market value, broke above the crucial psychological threshold of $50,000 on Tuesday for the first time since Sept. 7.
“It’s too early to say whether this will turn into a new support level in the short term, but it is clear that the overriding market view is bullish,” said Jason Deane, an analyst at Quantum Economics.
At press time, bitcoin was trading about $50,250, up 5.4% over the last 24 hours.
Given the difficult environment across all other asset classes, bitcoin’s long-term holders are the backbone in this rally above the $50,000 level, said Edward Moya, senior analyst at Oanda, in an interview with CoinDesk.
“If momentum buying continues and the price rallies above $52,000, we could confirm the end of this consolidation pattern,” said Moya. (A consolidation pattern is a pause in a stock’s trend that allows the trend to continue further.)
Wall Street is in for a choppy period of dealing with market risks, such as the prospect of the Federal Reserve tapering its $120 billion-a-month of monetary stimulus, an energy crunch and rising bond yields, according to Moya.
This should only help cryptos over the short term,” he said.
“Bitcoin breaking $50,000 is a confirmation of the bull market being back,” said Lucas Outumuro, head of research at IntoTheBlock.
According to the firm, more than 800,000 BTC were previously acquired around $48,000. Sometimes buyers and sellers will target these entry levels for key trading decisions.
“Such high concentration of volume translates into resistance in price action,” Outumuro said. “Now that we’ve surpassed that level, there doesn’t seem to be meaningful resistance up to $56,000.”
The latest surge in bitcoin appeared to lead a broad rally in cryptocurrency prices. The Ethereum blockchain’s native cryptocurrency, ether, was up 3%, while Polygon’s MATIC rose 4.8% and Binance’s BNB coin gained 4%.