Bitcoin Hits $57,250 as Interest in BTC Surges: But Analyst Asks To Keep An Eye On This Major Negative Story

The leading cryptocurrency, Bitcoin, continues to power higher – now approaching within 20% of its former peak price above $68,600 printed over two years ago. According to market intelligence firm Santiment, Bitcoin surged to a high of around $57,250 as of February 2024 before falling to its current price of $56,412.

Bitcoin’s relentless recovery now brings it to the cusp of a hugely symbolic breakthrough. The implications of outpacing prior bull market valuations carry tremendous significance for broader sentiment and the technical outlook.

Alts Could Temporarily Lose Steam if Bitcoin Dominance Climbs

However, Santiment cautions traders that previous instances of Bitcoin crossing major resistance often subsequently sparked short-term mania into more speculative ‘altcoins’ as profits chased into the riskiest corners of the crypto complex, hunting further outsized gains.

But this time may prove different. If Bitcoin reclaims its throne by exceeding past rally highs, its market capitalization dominance over the entire industry could expand drastically, temporarily starving smaller alternative projects of liquidity as money pours back into the king of crypto.

“If smaller traders try to beat whales to the punch and begin pumping memecoins, don’t be surprised if Bitcoin dominance simply continues to grow,” Santiment warns. Periods of extreme Bitcoin-favoring risk often punctuate the middle stages of renewed bull markets.

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Looming Industry Issues Could Pause Uptrend

However, just as Bitcoin reaches escape velocity, Santiment also flags the unfortunate timing of exchange Bitforex silently halting all user withdrawals without explanation after over $56.5 million suspiciously vanished from custody.

As the researchers conclude, “depending on the level of concern the crowd conveys during the new price highs, there could be a temporary halt to this celebration.” 

Yet eventually, momentum should overpower fear. If historical patterns repeat, the path opens for Bitcoin to eclipse its former peak, reigniting even greater excitement that cascades across the now mature and globally interwoven crypto economy.

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Vignesh Karunanidhi
Vignesh Karunanidhi

Seasoned crypto writer with deep passion for blockchain and cryptocurrency