As the world watched in anticipation, Bitcoin, the largest cryptocurrency by market capitalization, managed to regain its bullish momentum on February 3, after a significant fall below $93,000. In an impressive turnaround, the digital currency surged beyond the $102,000 mark, marking a 3.64% increase within a span of 24 hours.
This recovery comes after an unsettling drop earlier this week that saw Bitcoin plummet to a three-week low, shedding a staggering 14% of its value. Several financial experts have suggested that this downward spiral was triggered by U.S. President Donald Trump’s decision to implement a 25% tariff on Canada and Mexico. There are also indications that similar trade fees could be imposed on the European Union (EU) in the near future.
Sumit Gupta, the Co-Founder of CoinDCX, emphasized the link between geopolitical events and market volatility. He noted, “The recent tariff announcements, which introduced higher tariffs on Canada, Mexico, and China, underscore the impact of geopolitical shifts on global markets. In the short term, such measures can introduce significant volatility – just as we saw when Bitcoin plummeted following similar tariffs and trade tensions in the past.”
At the time of writing, Bitcoin is hovering around $101,203, with a remarkable market capitalization of $2 trillion, as per data from CoinMarketCap.
The question now is whether Bitcoin is on the cusp of another bull run. Celebrated crypto analyst, Rekt Capital, took to X to laud the recovery of Bitcoin, stating, “Bitcoin has successfully revisited the $101k level”. He emphasized the importance of this level, suggesting that it now needs to be reclaimed as support. To achieve this, Bitcoin must secure a daily close above this level and successfully retest it. If the $101k level is established as support, Bitcoin could gain momentum and challenge the next key resistance along the blue diagonal as shown in his graph.
As speculation continues to mount, there are murmurs within the market that large investors are steadily increasing their Bitcoin holdings. Concurrently, Bitcoin miners appear to be selling less of their holdings, which could signal the onset of a new bull run. If this speculation proves accurate, Bitcoin could potentially shatter another psychological barrier, the $110,000 mark.
As the world of cryptocurrency continues to evolve and mature, these developments underline the shifting landscape and the potential for significant changes in the near future. Whether Bitcoin can maintain its momentum and continue its upward trajectory remains to be seen, however, for now, all eyes remain firmly fixed on this digital currency powerhouse.