Bitcoin smashes through $50,000 mark and hits two-year high

Bitcoin has surged past the $50,000 mark, reaching its highest value in over two years. The cryptocurrency rose to $50,334.00, hitting levels last seen in December 2021. The price of Bitcoin currently stands at $49,875.00, reflecting a 3.5% increase, according to Coin Metrics.

Bitcoin surges past $50,000 mark

This surge comes on the heels of the recent launch of spot ETFs, which failed to drive Bitcoin above the $50,000 threshold but instead triggered a sell-off. Antoni Trenchev, the co-founder of crypto services firm Nexo, stated, "$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a selloff and some deep soul searching about these new bitcoin products."

Market performance and sentiment

Last week marked Bitcoin's strongest performance since December 8, with a 10.76% gain. Positive sentiment has returned to the crypto market following significant outflows from the Grayscale Bitcoin ETF, which had dampened sentiment over the past month. Not only are these outflows diminishing, but inflows are also on the rise. Furthermore, Bitcoin received a boost from the stock market, as the S&P 500 crossed the 5,000 mark last week.

Influence of market dynamics

James Butterfill, the head of research at crypto-focused asset manager CoinShares, noted, "Several factors are influencing market dynamics, including China's adoption of a more relaxed monetary policy, which has led to increased asset purchases, notably in bitcoin and equities." He also stated, "Demand for spot-bitcoin ETFs remains robust, with net inflows of $1.1 billion over the past week and $2.8 billion since their launch." "On Friday alone, ETFs acquired 12,000 bitcoin, significantly outpacing the daily creation rate of approximately 900 new bitcoins."

Key resistance point

Investors are closely monitoring the $48,600 level as a key resistance point. If Bitcoin can breach and sustain this level, it could pave the way for reaching new highs beyond $50,000 and potentially setting a new all-time high, as per chart analysts.

Market impact

Monday's surge also lifted crypto equities, with Coinbase gaining over 4% and Bitcoin proxy Microstrategy advancing nearly 10%. Several mining stocks registered double-digit gains, with CleanSpark rising about 12% and Iris Energy surging 16%. Marathon Digital also saw a 12% increase.