The flagship cryptocurrency Bitcoin has recovered above the $41,000 level with the second biggest crypto reclaiming the $3,000 price mark. Analysts offer two reasons for the bullish reversals of these top cryptocurrencies.
Nasdaq index rising over 2 percent
Bitcoin has recently been closely correlated with Nasdaq Composite Index and Dow Jones of the stock market. Recently Nasdaq demonstrated a 2 percent rise, which was likely to contribute to Bitcoin’s rise above $41,400, according to the Chinese cryptocurrency journalist and blogger Colin Wu.
Bitcoin broke through $41,600, a 24h increase of 12%, and Ethereum broke through $3,000. Only a few of the top 100 crypto have gained more than BTC and ETH. The Nasdaq index, which has been closely associated with cryptocurrencies recently, rose more than 2%.— Wu Blockchain (@WuBlockchain) February 5, 2022
Santiment on-chain data vendor has also mentioned the rise in the equities market as a reason for the Bitcoin price surge.
As the price started going up on Friday, positive sentiment from crypto traders versus negative one spiked to the highest level since the end of October 2021.
? #Bitcoin has leapt back to the $40k's on Friday in tandem with equities markets surging. With this upswing, traders' positive vs. negative commentary has blasted off to its highest ratio since late October, as $BTC maximalists are chiming in. ? https://t.co/AP88CigUTN pic.twitter.com/1jrsTd1dfl— Santiment (@santimentfeed) February 4, 2022
Bitcoin rise driven by the spot market
Wu also tweeted that, even though Bitcoin and Ethereum have shown increases of 12 percent and 6 percent over the past 24 hours, respectively, other cryptocurrencies have not gained more. CoinMarketCap, though, shows that some of altcoins have surged higher – such as Near Protocol (15.50 percent), Decentraland (MANA) (13.20 percent), LEO (22.66 percent), SAND (17.67 percent), etc.
Still, Wu says that the likely driver of the price rise for Bitcoin and Ethereum has been the spot market, not the market of crypto derivatives. He has shared data that over the past 24 hours, the volume of Bitcoin futures liquidations totaled only $100 million with $90 million of shorts liquidated, which means that the derivatives market was relatively cold.
Data shows that despite the sharp rise in prices, the 24-hour btc contract liquidation volume was only US$100 million, and US$90 million in short positions were liquidated, indicating that the derivatives market was relatively cold and the rise was driven by the spot market.— Wu Blockchain (@WuBlockchain) February 5, 2022
Peter Schiff weighs in on Bitcoin price surge
Prominent Bitcoin skeptic, cofounder of SchiffGold, lover of gold Peter Schiff has commented on the Bitcoin price surge above $41,000, trolling Bitcoin supporters. He tweeted that this may be the last chance to buy the leading crypto above $40,000.
Previously, he stated on Twitter that he expected Bitcoin to drop below $30,000 and then face a flash crash that would take BTC to the $10,000 low.
His son Spencer is a Bitcoiner, though, despite multiple attempts of Schiff senior to convert him to gold. Schiff junior tweeted that he had bought more Bitcoin when the price went up.
Just bought some more, thanks for reminding me— Spencer Schiff (@SpencerKSchiff) February 4, 2022