Bitcoin and cryptocurrency prices have rocketed higher, following global stock markets that have rebounded as investors come to terms with the Federal Reserve's inflation-busting interest rate hikes.
The bitcoin price surged to over $45,000 per bitcoin before falling back slightly and has now added around $10,000 to its price since dropping to lows of around $35,000 last month. Ethereum, the second-largest cryptocurrency after bitcoin, has also rallied as traders eye a looming upgrade that many think could turbocharge its price while cardano, an ethereum rival, has surged 40% over the last week.
The crypto rally has added $500 billion to the combined crypto market, which has now hit $2 trillion for the first time since mid-February as bitcoin, ethereum, BNB, XRP, cardano and solana make large gains.
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While crypto traders and investors are cheering the latest rally, some fear it could fade unless the bitcoin price manages to gain a foothold over $45,000.
"Confidence in the formation of a strong bullish momentum will come only after [the bitcoin price] fixes above $45,000, from where we saw reversals in February and early March," Alex Kuptsikevich, FxPro senior market analyst, wrote in emailed comments.
Kuptsikevich expects bitcoin's rally will help the wider crypto market, including ethereum, BNB, XRP, solana and cardano which have outperformed bitcoin over the last week.
"Moderate but steady optimism around bitcoin is the best breeding ground for altcoin buyers," Kuptsikevich wrote. "It is clearly seen that their dynamics are now better than that of [bitcoin]. If this trend continues for a couple more days, the effect of a feedback loop may work, when the outstripping growth of altcoins will pull bitcoin up."
Crypto prices have followed stock markets higher over the last week, with the S&P 500 bouncing back from correction territory in late February.
"Although bitcoin is remaining strong in the short term, rising oil prices increase the likelihood of a recession over the coming year or so," Marcus Sotiriou, an analyst at the U.K.-based digital asset broker GlobalBlock, wrote in an emailed note. "Despite the uncertain macro environment, crypto developers continue to innovate and whales continue to accumulate bitcoin."
