- Bitcoin has surged back above $45,000 for the first time since January, reaching its highest level in weeks and fueling a rally in crypto stocks.
- The rise follows a period of rangebound trading and appears driven by increased accumulation by large “whale” investors who are confident in future appreciation.
- Declining trading volumes in the two weeks prior likely preceded this strength, as falling activity often foreshadows bursts of volatility.
The price of bitcoin has climbed above $45,000 for the first time since early January. This marks bitcoin’s highest level in almost a month and comes amid a rally in crypto-related stocks.
Recent Price Action Reflects Renewed Optimism
Bitcoin was trading around $45,400 on Thursday, up nearly 3% on the day, according to Coin Metrics data. The move higher in bitcoin fueled gains in crypto-exchange Coinbase, which jumped about 8%, while bitcoin proxy MicroStrategy added 14%.
The cryptocurrency’s rise follows a period of rangebound trading below its December and January highs. However, traders point to increasing bitcoin accumulation by large “whale” investors over the past two weeks as a bullish signal.
Whale Activity Suggests Confidence in Future Appreciation
“What’s happening now appears to be large investors – whales, institutions, others – accumulating assets ahead of what many believe will be a strong bull cycle through the end of the year,” said Bartosz Lipiski, CEO of crypto trading platform CubeExchange.
Lipinski highlights the number of bitcoin wallets holding more than 1,000 BTC has risen significantly in recent weeks. This suggests new participants are building sizable bitcoin positions in anticipation of future price increases.
Declining Volumes Preceded Recent Strength
In the two weeks prior to the latest bitcoin rally, average daily trading volumes fell nearly 30% week-over-week, according to JPMorgan. Ether volumes decreased 40% over the same period.
The pullback in crypto trading activity highlights how declining volumes often foreshadow bursts of directional volatility. With bitcoin appearing to find its footing above $45,000, traders will be watching to see if buying momentum can be sustained.
