Crypto Market Rebounds Again

Bitcoin gained nearly 2% on Monday, moving close to $80,000 and reaching this level for the first time since May. Ether also rose by around 2% to nearly $2,500, lifting shares of cryptocurrency-related companies. Bitcoin has gained more than 20% over the past three days, with the liquidation of over $4 billion in bearish crypto positions adding further momentum to the rally.

Strong investor demand is another major factor behind the rise. Spot Bitcoin ETFs attracted around $1.92 billion in inflows last week, marking their highest weekly inflows since October. Concerns over US inflation, fiscal deficits and rising government debt have also increased interest in alternative assets such as Bitcoin and gold. Lower bond yields following increased purchases of long-term US government bonds have further supported the trend.

The key question now is whether the rally signals a sustained uptrend or a temporary surge. Bitcoin also gained around 20% in three days in January 2023, but that rally failed to last. Prominent investor Ray Dalio has warned of potential economic challenges for major economies and suggested that investors could consider holding some Bitcoin as part of a diversified portfolio. For now, ETF inflows, short-position liquidations and broader economic concerns are supporting Bitcoin’s momentum.