Bitcoin shines in February… What will the month of March hold for her?
The last year ended up with the cryptocurrency industry in a very nice place, with Bitcoin, the world’s largest cryptocurrency in particular, enjoying some excellent price progress, reaching an all-time high in mid-December 2017, and since then, it’s been advancing more and more. More than ever.
Until now, The year 2021 has already seen rises and corrections and then more gatherings in addition to many new records, The last of which reached near the $60,000 barrier during the month of February.
February was really a great month for the top cryptocurrencies, as Bitcoin, Ethereum and Cardano marked a number of new highs, and all three cryptocurrencies broke through the market cap levels for the first time.
On February 19, the total market capitalization of Bitcoin rose above $1 trillion for the first time in its history. The unprecedented wave of demand from institutions spurred by the investment of Tesla pushed the digital currency to an all-time high of $58,367, To set a new record as well as a new market value.
In the history of financial markets, there are only a few tradable assets that have reached this value, with Bitcoin at the time ranked eighth in terms of market capitalization among all the world’s traded assets including stocks and commodities, and the most popular digital currency has become just one step away from Bypass Google, two steps from silver.
What drove bitcoin forward?
Bitcoin’s trading price was affected by some news reports, however, this months-long rally was primarily driven by increased demand from institutional investors who are now buying massive amounts of Bitcoin, as well as slowing supply caused by the halving last year.
The traditional laws of supply and demand were the biggest stages of the rise, There were other developments that caused the highest price of Bitcoin ever recorded, Like Elon Musk declaring himself pro-Bitcoin, a little later, Tesla, the world’s largest electric car maker owned by Elon Musk, has invested nearly $1 billion in the leading currency, The currency was strongly affected by this news as it led to a rise of $10,000 to $48,200.
Bitcoin drops below $1 trillion market cap
In the last week of February, Bitcoin started to enter a correction phase that led to a major downturn in the entire crypto market . To witness one of the most dangerous corrections since the beginning of the upward trend.
The currency price fell sharply by more than 20%, to lose about 13,000 dollars, from the highest level at 58,367 dollars, to reach 44,888 dollars, Before correcting back to where it is currently trading at around $48,000, The price of Ethereum also fell under heavy pressure, falling to $1,356 from an all-time high of $2,041.
Meanwhile, MicroStrategy, which began investing in the cryptocurrency last summer, announced a planned capital increase from $600 million to $900 million on February 24. It also said it intends to invest the proceeds from the bond sale in bitcoin for its balance sheet. This is expected to support the currency in the coming weeks as buyers anticipate further investment.
Square also made another huge investment in Bitcoin, with purchases amounting to $170 million. As a result of the new purchase, Square has now bought a total of 3,318 bitcoins, representing 5% of the cash. Square revealed that it purchased the coin at an average price of $51,235.
It is worth noting that the company bought bitcoin for 50 million dollars last year, The value of the cryptocurrency was just over $10,000, With the cryptocurrency’s upward movement this year, The company will make huge profits from its investment.
March tends to correct or consolidate technically
Technically, some analysts have seen such a big drop as normal as historical data reveals that the end of February usually marks a corrective phase for the crypto market.
While history may not always repeat itself, history rhymes and historical data often provide insight into how market cycles work, and by reading this history from a Bitcoin weekly chart, one analyst said that past data from a leading cryptocurrency chart indicates March tends to be a period of correction or consolidation.
Huge corrections occurred during the month of March in 2017, 2018, and 2020, While 2016 and 2019 witnessed price movement in a sideways range, In March 2020, Bitcoin collapsed causing it to lose nearly 50% of its value, hitting a low of $3,800 at the time. One thing to note from this event is that there are no absolutes, The current institutional buying trend coupled with a shift in interest towards cryptocurrencies after Visa and Mastercard fee hikes amid inflation concerns could change the course of a previously defined trend in March.
Other variables may be the incoming US stimulus checks, It could unleash a new $170 billion wave of new retail flows into the stock market, A survey revealed that 37% of retail investors plan to put their stimulus money directly into stocks.
Record levels for Ethereum and Cardano
Ethereum, the second largest cryptocurrency, also made record highs in February, After the currency futures contracts were launched on February 1, It also reached an all-time high of $2,041 on February 20 before entering a correction.
The last event of this month was a sudden crash on the Kraken exchange. Within a minute, Ethereum fell on the exchange to reach $700 on Monday (February 22) from $1,628 just three minutes ago. Ethereum was not alone in this amazing drop, Cardano coin also suffered. Also from this fate on the Kraken, where the coin tumbled to $ 0.156 from $ 0.842 three minutes ago.
Ethereum and Cardano fell slightly less than half compared to prices on other exchanges during Monday’s massive sell-off.
For Cardano, February was great. Still in a strong uptrend, the currency also traded to a yearly high of $1.26 on February 26th.
How high is bitcoin?
Bitcoin expected to end the first quarter at $50,000, This level is where the currency now stands in one way or another. It is true that in the past few weeks the currency has exceeded this level a lot, However, They are close to them, which indicates that the predictions may be correct.
Many believe that the currency continues to rise to reach $ 80,000 by the end of June, this would give it the highest level ever, and restore the confidence that investors had in it, and the end of the year will see it reach $ 90,000 for each currency according to the expectations of most market analysts and experts Bitcoin has already proven to be quite unpredictable, though, so it may or may not cross this level before the end of the year.