Bitcoin breached US$120,000 ($153,798) for the first time, with investor optimism increasing almost daily after it emerged from a narrow trading range that had left skeptics wondering whether the original cryptocurrency would regain the record-breaking momentum seen at the start of the year.
After surging on the election of Donald Trump to a second US presidential term, Bitcoin had settled into a pattern of fluctuating on either side of US$100,000 for several months.
Concern about Trump’s political and economic policies had helped to temper optimism over the pro-crypto agenda of his administration.
Now with other risk assets such as stocks back around record highs, Bitcoin has also resumed its push higher.
“This shift signals a maturing perspective on Bitcoin — not merely a speculative asset, but a macro hedge and a structurally scarce store of value,” said George Mandres, senior trader at XBTO Trading LLC.
“A surge in risk-on sentiment across equities, coupled with significant institutional inflows into spot Bitcoin and Ethereum ETFs, has fueled this steady ascent, notably absent the sharp volatility of previous bull runs.”
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The crypto market bellwether rose as much as 1.9% to US$121,344, and is now up about 30% since December.
Bitcoin more than doubled last year.
Bitcoin’s renewed momentum has also spilled over to smaller tokens — second-ranked Ether rose 1.5%, while XRP and Solana both increased about 2.7% around noon in Singapore on Monday.
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“Bitcoin’s cleared US$120,000, but the real test is US$125,000,” said Rachael Lucas, a crypto analyst at BTC Markets.
While short-term profit booking can be expected, “the uptrend has fuel” driven by strong demand from exchange traded funds, she added.
“Support at US$112,000 and any dip looks like a buying opportunity, not a reversal.”
Helping to fuel the latest rally was the liquidation of bearish crypto bets at the end of the week.
Traders who shorted Bitcoin bore the brunt of the rapid damage, with over US$1 billion in positions wiped out, according to data from Coinglass.
The token rose on the back of anticipation for what a Congressional committee dubbed “Crypto Week,” where lawmakers in the US Congress are expected to debate and possibly vote on key cryptocurrency legislation.
Some analysts aren’t totally sold on the token’s continued rise.
“In my view, this isn’t a macro-driven rally, but rather an isolated event,” said Nicolai Sondergaard, a research analyst at Nansen.
“That said, recent US policy developments such as fiscal expansion and expectations of further monetary easing have created a backdrop that is undeniably favorable for Bitcoin.”
