It's been a wild and bizarre few days in the crypto world. Megacap tokens have seen continued volatility; Bitcoin (BTC 1.23%), Ethereum (Ethereum 0.88%) and dogecoin (Doge 7.23%) This is still a significant increase from yesterday's closing price (4:00 p.m. ET). These three tokens are up 2.8%, 3.8%, and 12.9%, respectively, in this time frame as of 1:45 PM ET.
Currently, these increases are significantly lower than the previous increases these tokens saw during yesterday's session. Bitcoin, which is largely considered a sector-wide benchmark, has given up a significant portion of those gains yesterday after surging to multi-year highs of over $63,000 per token. Currently, Bitcoin continues to hover around the $60,500 level, but it is significantly higher than the $45,000 level where the token started the year and the sub-$20,000 level that investors saw late last year.
Today, let's take a closer look at what's driving this positive price momentum among these three mega-cap tokens.
What is noteworthy about these virtual currencies is the inflow of capital.
Bitcoin’s rise towards record prices (around $69,000 per token in late 2021) is noteworthy. Initial interest in the world's largest cryptocurrency following the approval of the Spot Bitcoin ETF by the Securities and Exchange Commission has given way to selling pressure due to a variety of factors, including: FTXLiquidation of assets to improve the health of investors. But things may be looking up, with flows into Spot Bitcoin ETFs surging by more than $7 billion in the past two months as institutional investors jump into the digital asset in a manner reminiscent of the last bull market rally. It became.
Investors' bets on disruptions in Bitcoin's supply and demand have proven to be correct, and the momentum has allowed traders and speculators to bet on short-term spikes in the token's price, including perpetual contracts. interest in leveraged products is increasing. Notably, the Bitcoin perpetual futures funding rate has reached its highest level since the previous bull market peak in 2021. This shows that in addition to the billions of dollars of institutional capital flowing into Bitcoin alone, there is also a lot of speculative capital being leveraged.
For a more speculative asset like Dogecoin, this kind of trend is extremely bullish and is the main reason we see further big moves in meme tokens. Dogecoin price movement is highly dependent on the broader sentiment in the sector. And rising tides seem to be lifting all boats, as Bitcoin continues to be the benchmark asset by which others measure their worth.
Additionally, speculation is mounting as to when a Spot Ethereum ETF will be introduced. If the wave of money hitting Bitcoin also flows into Ethereum, investors could be in for a big rally. Therefore, the market has done its best to pre-discount these potential catalysts, and Ethereum has also been riding the momentum of the sector as a whole to new multi-year highs.
Where do we go from here?
If many investors were asked yesterday whether Bitcoin would reach an all-time high this year, the answer would likely have been a resounding yes. And given the fact that the world's largest cryptocurrency is currently within 15% of its all-time high, there is certainly something to this theory. Even if this period of stability we're seeing today rebounds in the coming days and weeks, with Bitcoin and its mega-cap stocks rising near or above all-time highs. I wouldn't be surprised.
Long-term investors who stuck with mega-cap tokens through the bear market period of 2022 and 2023 have been rewarded. Now, the question is how much profit-taking will take place at current levels and whether institutional capital flows and speculative activity will be enough to push these tokens to all-time highs. Indeed, these are the three tokens that all investors need to closely monitor right now.
