On Wednesday, Bitcoin (BTC) reached over $79,000, marking its highest point since early February as a significant breakout attempt gained traction. Over the past day, BTC saw an increase of 4.5%, propelling major altcoins like ether (ETH), BNB (BNB$649.92), Solana (SOL), and XRP upward. The CoinDesk 20 Index experienced a 3.5% rise overall.
In tandem, stocks linked to cryptocurrencies also saw gains. Strategy (MSTR), the biggest corporate BTC holder, surged by 10%, while Circle Internet (CRCL), a stablecoin issuer, advanced by 9%. Additionally, Coinbase (COIN) experienced a 6% increase, and Bitcoin mining companies MARA Holdings (MARA) and Riot Platforms (RIOT) both added between 6% and 7%.
The broader market backdrop also provided support. The S&P 500 climbed 0.9%, while the Nasdaq reached record highs with an additional gain of 1.3%, extending a risk-on sentiment.
These gains followed remarks by U.S. President Donald Trump late Tuesday, indicating an extension to the Iran ceasefire but maintaining a naval blockade around the Strait of Hormuz. However, uncertainty lingers regarding peace talks.
“BTC’s immediate trajectory is closely tied to macroeconomic and geopolitical events,” said Paul Howard, senior director at Wincent. He highlighted $72,000 as crucial support, while noting potential profit-taking could cap gains near $79,000-$80,000.
Despite existing macro risks, derivatives positioning might propel the rally upward. Perpetual swap traders are predominantly bearish, with seven-day funding rates hitting nearly three-year lows, as noted by Vetle Lunde, head of research at K33 Research. Meanwhile, rising open interest indicates new leverage entering the market.
“The combination of increasing leverage and deeply negative funding suggests that shorts in perps are accumulating, boosting both the likelihood and potential impact of a short squeeze,” he explained.
Lunde believes there is significant breakout potential for BTC due to concentrated shorts fueling upward movement. However, the $79,000-$80,000 range holds particular significance for Bitcoin as it aligns with the short-term holder realized price — an indicator of newer participants’ average cost basis, who are generally more sensitive to volatility and prone to selling at peaks.
Currently, BTC is testing this resistance level. Successfully surpassing it could indicate stronger rally conviction, while failure to maintain it might trigger renewed selling pressure and profit-taking from short-term holders.