Bitcoin is above $50,000, and the stakes for its rise are at a record high

© Reuters. – The coin crossed $50,000 in the past few hours, rising above the closely watched level for the first time in more than two years.

The biggest digital asset was trading at $50,100 at these moments of Tuesday trading today, up 4% in the last 24 hours, having previously touched $50,379. The token's value has tripled since the start of last year after a 64% decline in 2022. Bitcoin is $19,000 below the all-time high reached in November 2021.

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Meanwhile, Ethereum, the second-largest digital currency by market value, is up about 7.6% in the past 24 hours to $2,665.

Traders are betting positive options on Bitcoin at levels close to the cryptocurrency's all-time high of $69,000.

Over the weekend, several call options were traded at $65,000, $70,000 and $75,000 on the world's leading cryptocurrency options exchange by volume and open interest (TERBID).

Call options are the most popular sector of options trading. They allow their holders to acquire the rights to buy a particular cryptocurrency during a certain period of time. With this opportunity, the owner of the contract can reap significant rewards if his price predictions come true over a specified period of time. Collective buying of these options reflects upward momentum among market participants.

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“We're seeing a focus on open interest in the $50,000 options, and we've added $50,000, $60,000 and $75,000 options in the $50,000, $60,000 and $75,000 markets,” said Kelly Greer, head of Americas sales listings. Maturing from April to June. “These flows demonstrate the confidence of buyers who are willing to pay a premium to buy these positions, indicating that investors have a constructive view on Bitcoin's future,” he added.

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Recent bull runs are reminiscent of the 2020-2021 bull market, with market participants continuing to buy call options at cheap valuations of $80K or more.

Bitcoin has nearly doubled to $50,000 since early October, with prices rising from $38,500 in the past three weeks, mainly due to strong ETF inflows.

The cryptocurrency's 14-day relative strength index, a popular tool for technical analysis, rose above 70, indicating overbought conditions in the Bitcoin market. An overbought reading is interpreted as a signal of an impending bearish reversal, although it may indicate that the market has risen too quickly in the short term and may be taking a break.

Also worrying is that the forced sale of $1.6 billion worth of Bitcoin and Ethereum by failed cryptocurrency lender Genesis could cause prices to fall. Genesis recently filed a motion asking a US judge to approve the sale of the aforementioned cryptocurrencies.

The price volatility seen since Bitcoin's introduction more than a decade ago has long been one of the main attractions for speculators. Although originally touted as an alternative to the traditional financial system, the recent surge has been fueled by the belief that US approval of bitcoin exchange-traded funds last month is leading to mainstream adoption.

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A fresh rise in cryptocurrency prices, expectations of a more accommodative monetary policy will increase the attractiveness of riskier assets.

Bitcoin has recovered all of its losses since the May 2022 explosion of stablecoin TerraUSD, which unleashed a wave of losses that ultimately helped topple Sam Bankman Fried's FTX exchange in November 2022.

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Nine spot bitcoin exchange-traded funds debuted on January 11, while the more than decade-old grayscale bitcoin trust was converted into an ETF on the same day. The importance of these funds is that they broaden the investor base for the token. New funds have attracted $9 billion so far, while more than $6 billion in exits from grayscale as its turnaround appears to be running on steam.

Hopes of a planned quadrennial Bitcoin halving in April are also spreading across cryptocurrencies. Halves the amount of bitcoin miners receive to run powerful computers that verify transactions on the blockchain. This phenomenon is often seen as support for prices based on historical precedents.


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