Crypto fans are now on a real high, reaping profits from a stunning rally in the crypto market. The rally is accompanied by extreme volatility. Last week, the Bitcoin volatility index was at its strongest level in almost a year.
The storm in the crypto market was triggered by a variety of catalysts: the upcoming halving that is expected in April, the introduction of spot Bitcoin exchange-traded funds (ETFs) in the US, and a robust investment flow into the news exchange product. All these factors account for big price swings of digital assets and the overall uptrend.
Analysts at crypto think tanks Glassnode and Cryptovizart came up with a bullish forecast for the flagship crypto roughly a month before its halving. They believe that Bitcoin price will skyrocket shortly, so the average long-term holder is sitting at a profit of approximately 228%.
Following the highly-anticipated approval of spot Bitcoin ETFs by the US Securities and Exchange Commission in January 2024, the new exchange product generated buoyant demand both among individual investors and asset management firms. On the back of the hype, Bitcoin surged to a new record on March 8, breaking through $70,000 for the first time ever. The crypto even spiked to $70,170.00 last Friday.
Interestingly, despite optimistic long-term forecasts, investors are tempted to sell their coins and spend the gains. “Tuesday’s sharp Bitcoin sell-off was healthy, necessary and a prelude to further gains. Volatility defines bitcoin bull markets and 2024 will be littered with sudden and gut-wrenching 10%-20% plunges,” Antoni Trenchev, co-founder of crypto exchange Nexo, commented on recent price swings. Experts at Glassnode predict that panic selling in the crypto market is set to ebb away.
