Bitcoin has crested the $40,000 mark after crawling sideways at around $36,000 over the past few weeks.
That’s an important psychological hurdle, and it has a lot of people talking about the future of Bitcoin dominance, compared to a range of altcoins that could rival the front-runner cryptocurrency for market share in coming years.
“After challenging $42,000 over the weekend, there was a cautious sense of optimism as higher levels remained in play,” writes William Suberg at Cointelegraph, characterizing Bitcoin as ‘in a fighting mood.’ “Sunday saw a fresh push, with overnight progress attacking $43,000 before fresh consolidation. With Monday’s Wall Street open primed to deliver more of the turbulence in big tech stocks seen late last week, the environment for crypto traders is an interesting one in February. With its notable positive correlation, Bitcoin is thus sensitive to moves up and down — but equities refuse to move unanimously in the same direction.”
Market enthusiasts are looking at inflation to see if it will bring more traders toward safe harbor assets like Bitcoin.
“Inflation is REAL,” said trader Peter Brandt in response, as quoted in Suberg’s coverage. “(Recent financial activity is) due to the flood of liquidity added in past two years. $$$ abounds. The Fed is way behind the curve in raising rates. The 10-Yr Note is headed to 2.35% in the near-term and 3.0% over the next couple of years.”
Bitcoin’s coin prices may also be changing in how they track equities, which may have some BTC traders re-orienting portfolios.
“Bitcoin’s 1D correlation to the Nasdaq is starting to fall from historically high levels,” tweets Will Clements in recent analysis.
Look for the effects of Fed activity, and or additional movements in BTC prices. If history is any guide, when dislodged from a stasis, BTC usually continues to fluctuate to some extent.