(Bloomberg) — Bitcoin surged past $73,000 as cryptocurrency markets built on recent resilience, drawing momentum from ETF inflows and rising open interest even as Wall Street steadied itself against an unresolved Middle East conflict.
The largest cryptocurrency rallied as much as 8.9% to around $74,064 reaching its highest level in nearly a month. The spike – only the largest one-day move since last Wednesday – is indicative of the uncertainty that has surrounded the digital asset sector since prices crash in early October. Ether surged, climbing as much as 10% to trade above $2,100.
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“The market is moving away from crisis pricing and into a consolidation phase where positioning, rather than panic hedging, becomes the dominant driver of price action,” according to report from the blockchain data firm Glassnode.
Bitcoin experienced significant short selling earlier this week as investors moved away from riskier assets and shifted toward safe haven investments, traders said.
“Short sellers were too confident that the market would keep falling and placed their orders too close to the market,” said Alex Kuptsikevich, chief market analyst at FxPro. “Finding itself near the upper limit of the February range, Bitcoin only needed to take a step up to trigger a short squeeze. Add to this the oversold conditions that had been building since October, and you have the perfect mix for a surge.”
That volatility, long absent from a market that had spent months grinding lower, is itself a signal: price swings can draw back retail traders and open fresh two-way opportunities for institutional desks that had been sitting on the sidelines.
Gains accelerated while stocks rose and oil steadied as signs the conflict in Iran may be shorter-lived than feared lifted sentiment. Bitcoin fell to around $63,000 after Saturday’s US and Israeli strikes on Iran. US spot Bitcoin ETFs pulling in more than $680 million over the past two days, according to data compiled by Bloomberg.
“There’s strong demand in the perpetual futures market after Bitcoin’s price had been consolidating for the past month,” said Julio Moreno, head of research at CryptoQuant. “Open interest spiked as prices increase, indicating traders opened fresh long positions.”
Even with Wednesday’s rebound, crypto markets remain on edge, with Bitcoin still about 40% below its October peak following a months-long selloff. That backdrop has put Bitcoin in a unique position amid geopolitical turmoil, providing the basis for a rally while other asset classes may be due a breather. Bitcoin ETF flows are showing early stabilization and continued recovery would signal improving institutional sentiment, according to Glassnode.
