Bitcoin Surges Nearly 12% Following Price Recovery

Bitcoin’s Price Recovery: A Significant Surge

Bitcoin’s (BTC) recent price recovery has gained notable momentum, particularly following Monday’s sharp decline. On Thursday, the cryptocurrency experienced a remarkable surge of nearly 12%, reaching $61,720. This marked the most significant single-day UTC gain since February 28, 2022, when Bitcoin’s price rallied over 14%, as reported by the charting platform TradingView. Additionally, the total cryptocurrency market capitalization saw an 11% increase, climbing to $2.11 trillion, representing the largest jump since November 10, 2022.

The majority of these gains occurred during U.S. trading hours, buoyed by better-than-expected jobless claims data that alleviated recession fears and pushed U.S. stocks higher. Wall Street’s fear index, known as the VIX, fell to 23, providing positive signals for risk assets, including cryptocurrencies. Notably, the rally in the traditionally anti-risk Japanese yen stalled as the Bank of Japan signaled its reluctance to implement near-term rate hikes.

In a noteworthy development, U.S.-listed spot exchange-traded funds (ETFs) attracted $194.6 million in investor funds, the highest figure since July 2022, according to data from Farside Investors. Among these, BlackRock’s IBIT alone garnered $157.6 million in investments.

Last week, both stocks and Bitcoin began to lose ground after the Bank of Japan raised interest rates, which triggered a significant unwinding of yen carry trades and heightened concerns regarding the U.S. economy. The selling pressure escalated so severely on Monday that Bitcoin’s price dipped to $50,000 at one point, after having peaked near $70,000 just a week prior.

According to blockchain analytics firm Santiment, large holders, often referred to as “whales,” took advantage of the price crash on Monday by accumulating Bitcoin. They reported that “the transactions from Bitcoin whales on August 5th and 6th reached their highest levels since the first week of April. Wallets holding between 10 and 1,000 BTC rapidly increased their holdings during the price dip that saw the leading cryptocurrency fall below the $50,000 mark.”

Market Outlook: Key Levels to Watch

Looking forward, market analysts suggest that the $61,800 level will be crucial for bulls to overcome. Alex Kuptsikevich, a senior market analyst at FxPro, indicated, “The ability to close above this level at $61.8K could prompt buyers to rally quickly towards $67K. However, a retreat from this point would set the stage for a potential return to the lows observed in July and August, near $55.5K.” Kuptsikevich emphasized that the $61,800 mark represents the confluence of the 50- and 200-day simple moving averages.

According to Investment Advisor Two Prime, the overall market bias remains bullish as long as prices maintain support at $54,000. They noted that geopolitical issues and the Federal Reserve’s policies will play a critical role in determining the next significant price movements. “We continue to monitor the $54K level as a major support area, followed by $50K. Thus far, these levels have held strong, with consistent demand surfacing each time Bitcoin approaches this area,” Two Prime stated in a Telegram update to clients. They added, “Now, we await developments regarding the Israel/Iran conflict and whether the U.S. government will intervene to mitigate risks in both the geopolitical landscape and the Federal Reserve’s monetary policies.”