Bitcoin (BTC) Price Extends Rally Above $5,500
A sudden burst in volumes is pushing BTC prices to a new range as the coin still awaits a bigger rally.
Bitcoin (BTC) was pushed to a new height early on Tuesday, breaking above $5,500 and returning to levels not seen since November 16, 2018. The prices are also setting new yearly highs, as the price spike extends, giving hopes for a more decisive end to the bear market.
BTC traded at $5,549.14 as of 6:50 UTC on Tuesday, on an upward trend promising to extend the rally. Volumes once again returned to levels above $16 billion’s equivalent in 24 hours. This time, almost all markets are showing prices above $5,500, despite the pairing, with much fewer price anomalies.
The current rally sees about 76% of all BTC volumes happen in the pairing with Tether (USDT), further stressing the importance of the stablecoin for the current recovery from lows around $3,800. The high prevalence of USDT is also creating fears that the rally is unsustainable, or highly dependent on an asset partially backed by credit, as the Tether company admitted recently.
With the most recent gains, BTC has added 37% to its price since the start of 2019. Several altcoins pushed off from lows, marking gains of above 300% in some cases. However, the recent rally is smaller and riskier compared to the hype in the fall of 2017.
There is no clear scenario expected for BTC, as the asset is seen possibly remaining bound within a range, with crashes to lower levels not excluded.
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Still, BTC trading shows a prevalence of dollar investments, with increasing Coinbase activity, showing that US-based investors may be returning.
As the end of April approaches, there are few expectations of an approval of a Bitcoin exchange-traded fund (ETF). In the past, those expectations helped boost the BTC price somewhat, but now the rise seems to be happening on a more speculative basis.
The higher BTC prices are also boosting the mining business. The network hashrate has hovered close to 50 EH/s, as prices above $5,000 are rewarding, especially for the Chinese mining sector, where electricity prices ensure profitability at much lower BTC market valuations.
Bitcoin transactions also exceed 340,000 per day, and for the past few days, the backlog of transactions have increased. There are more than 31,000 unconfirmed transactions as of 7:30 UTC, about 10 times higher compared to the usual backlog. The higher level of pending transactions may be due to more wallets activating to make use of higher trading activity.