Bitcoin Spikes to $70,000, Leading Cryptocurrency Rally Amid Market Volatility

Bitcoin surged to over $70,000, lifting other cryptocurrencies and related stocks.

On the final week of March, Bitcoin experienced a spike, reclaiming the $70,000 level. The flagship cryptocurrency surged by about 7% to $70,617.68, according to Coin Metrics. Meanwhile, Ether also jumped 7% to reach $3,621.30. Other cryptocurrencies followed suit, riding the bitcoin wave. MicroStrategy, a proxy for the price of bitcoin, saw a 20% surge, while Coinbase advanced by 9%. The mining sector also benefited from bitcoin's surge, with Marathon Digital and Riot Platforms up by 4% and 9%, respectively. CleanSpark rose by 22%, and Cipher Mining gained 15%.

Market Corrections and Rebounds

Bitcoin had been in correction mode for the past week after reaching an all-time high of $73,797.68 on March 14. Last Wednesday, it experienced a dip to about $60,800. Alex Thorn, head of firmwide research at Galaxy Digital, reassured investors, stating that such declines are "well within the norm of historical bull market short-term corrections."

Factors Behind the Surge

The reason for Monday's surge was not explicitly clear, but analysts pointed out that the cryptocurrency's price action in March has been characterized by new highs followed by healthy pullbacks. Thorn suggested that investors were taking a pause from selling shares of bitcoin exchange-traded funds. Additionally, Sam Callahan, lead analyst at bitcoin services firm Swan Bitcoin, stated that the surge might be tied to the messaging from the Federal Reserve the previous week, indicating that they are considering rate cuts and reducing the pace of the quantitative tightening program this year. He explained that such actions will enhance liquidity conditions and act as a positive catalyst for asset prices. Bitcoin, acting as a barometer of liquidity conditions, responded favorably to the Fed's messaging that monetary policy will likely ease in the near future.