Bitcoin on Track for Largest Monthly Increase in 36 Months

Analysts suggest that the cryptocurrency market still has significant potential for growth.

Bitcoin is set to end February with an impressive 44% increase, marking its most substantial monthly gain since December 2020.

According to Galaxy’s Alex Thorn, the demand for Bitcoin through U.S.-listed spot bitcoin ETFs is met with limited supply, primarily due to long-term holders who are reluctant to sell.

Bitcoin’s performance in February has been remarkable, reaching milestones like surpassing $50,000 and $60,000 for the first time in years, with a peak of $64,000. Despite this, analysts believe that the current bull market is far from reaching its peak.

The surge in Bitcoin’s value followed a temporary dip below $40,000 after the introduction of spot bitcoin exchange-traded funds (ETF) in the U.S. towards the end of January.

There’s potential for Bitcoin to achieve its highest-ever monthly closing price, needing to exceed $61,357 by midnight UTC, which was the closing price in October 2021 near the peak of the previous market cycle. At present, Bitcoin is trading around $61,200.

The cryptocurrency rally in February was widespread, with the CoinDesk 20 Index (CD20) rising by more than 40%.

Among the top performers of the CD20 were decentralized exchange Uniswap’s governance token (UNI), decentralized data storage network Filecoin’s FIL, and the popular meme token dogecoin (DOGE), all of which outpaced Bitcoin’s gains.

Despite Bitcoin’s price nearing its all-time high, some analysts believe there is still room for further growth.

Galaxy’s head of firmwide research, Alex Thorn, sees the U.S. spot bitcoin ETFs as a significant development, providing consistent and increasing demand for BTC. Moreover, around 75% of Bitcoin’s supply is held by long-term holders who have shown no inclination to sell even at recent high price levels.

On-chain transaction volume and retail interest in cryptocurrencies are still below levels seen during previous peaks, according to IntoTheBlock analysts.

Crypto analytics firm Swissblock predicts that Bitcoin’s current upward trend is just the beginning of what’s to come.

While there’s optimism about Bitcoin’s future trajectory, Swissblock analysts advise against entering the market hastily at current elevated levels. They suggest waiting for short-term pullbacks for better buying opportunities.

In a more cautious long-term forecast, a JPMorgan analyst report predicts that Bitcoin could correct to as low as $42,000 after the April halving, when miner rewards will be halved for the fourth time in Bitcoin’s history.