The crypto markets were ablaze with activity on Tuesday as Bitcoin made a bold charge toward the elusive $90,000 mark. In a rollercoaster trading session, the world’s largest cryptocurrency by market cap swung wildly between highs above $89,000 and lows under $86,000, ultimately encountering stiff resistance just shy of the much-anticipated milestone.
The intense price action triggered a flurry of liquidations in Bitcoin futures markets, with bulls and bears battling it out as nearly $900 million worth of positions were wiped out. According to data from Coinglass, the carnage was evenly split between long and short bets, underscoring the high stakes and divided opinions driving the volatile moves.
Dogecoin Steals the Show
While Bitcoin’s near-miss of $90,000 dominated headlines, it was Elon Musk’s pet project Dogecoin that stole the show. The meme-inspired token, which has long been a favorite of the tech billionaire, exploded more than 50% higher to top $0.43 – its loftiest level since the heady days of May 2021.
Dogecoin’s parabolic ascent came on the heels of Musk’s high-profile endorsement in his role as a technology advisor in the Trump administration. The rally left a trail of wrecked shorts in its wake, with DOGE futures racking up their largest single-day liquidations of the year at over $68 million. Open interest in the contracts also soared to near-record levels, signaling the manic speculative frenzy gripping the token.
Institutions Pile Into ETFs
The frothy crypto market conditions spilled over into the burgeoning space of exchange-traded funds, with Ether ETFs posting their biggest-ever daily inflows. BlackRock’s ETHA and Fidelity’s FETH products hauled in a cool $100 million apiece, riding the bullish sentiment even as Ethereum’s native token underperformed Bitcoin with a roughly 2.8% gain.
Not to be outdone, Bitcoin ETFs attracted their second-heaviest inflows on record, adding a whopping $1.1 billion as the crypto’s market cap swelled to $1.78 trillion. The mammoth influx propelled Bitcoin past silver to become the world’s eighth-most-valuable asset, spurring talk that the funds could soon eclipse their gold counterparts.
“Assets in the US spot bitcoin ETFs are now up to $84b, which is 2/3 of the way to what gold ETFs have, all the sudden there’s a decent shot they surpass gold before their first birthday (we predicted it would take 3-4yrs),” remarked Eric Balchunas, a senior analyst at Bloomberg.
Technicals Point to Further Gains
Bitcoin’s powerful rally has now placed it on a collision course with daunting technical resistance in the form of the former all-time highs near $64,000. However, crypto enthusiasts are quick to note that on-chain data, including elevated stablecoin liquidity and rising transaction counts, paints a constructive picture for continued gains.
Also working in the bulls’ favor is Bitcoin’s strengthening correlation with the tech-heavy Nasdaq’s outperformance of the broader S&P 500. The so-called “Nasdaq-to-S&P ratio” has frequently acted as a bellwether for the cryptocurrency’s fortunes, and its sharp uptick in recent sessions bodes well for those betting on an extension of the uptrend.
Looking Ahead
With Bitcoin tantalizingly close to carving out a fresh record high and the wider crypto complex firing on all cylinders, digital asset aficionados are increasingly confident that the tenacious “Uptober” rally has legs. Nonetheless, seasoned traders caution that the breakneck pace of the advance and the prevalence of high-risk speculative bets warrant a degree of caution.
As ever in the crypto space, the only certainty is more volatility ahead as the tug-of-war between fear and greed plays out across a market that never sleeps. For now, though, the animal spirits appear to have the upper hand as Bitcoin and its peers look to close out a momentous 2024 on a high note.
