The global cryptocurrency market is witnessing a significant bullish phase, with its total valuation climbing to $3.2 trillion, according to the latest data from CoinMarketCap. The 24-hour trading volume stood at a robust $126.05 billion, indicating heightened investor activity. This positive momentum, marked by a 1.39% gain in the last day and an approximate 6% rise over the past week, is attributed to a combination of factors including bullish derivatives trading, a short squeeze, and geopolitical uncertainties driving safe-haven demand.
Bitcoin Leads the Charge, Ethereum and Altcoins Follow
Bitcoin continues to assert its dominance, commanding 58.4% of the total crypto market share. The premier cryptocurrency enjoyed a strong run, briefly touching the $94,000 mark in early morning hours (IST) before settling at $93,328.11 at the time of reporting, marking a 0.8% daily increase. Its market capitalisation strengthened to $1.86 trillion, while trading volumes surged by 39.34% to $47 billion. Data from DeFiTracer indicates that major institutional players purchased nearly $4 billion worth of Bitcoin in the last 24 hours.
Ethereum, the second-largest token, was trading at $3,220.99, reflecting a gain of 1.85%. Its market cap reached $388.75 billion. Other major tokens also posted gains: Tether held steady at $0.9995, XRP surged 8.9% to $2.33, and Binance Coin traded at $904.62, up 0.6%.
Geopolitical Tensions and Market Sentiment: Expert Views
Analysts are closely watching the developments between the United States and Venezuela. Riya Sehgal, Research Analyst at Delta Exchange, noted that traders are linking the rally to early-year repositioning and optimism stemming from US military operations in Venezuela, which could potentially lower global energy costs and benefit Bitcoin mining economics.
However, the CoinSwitch markets desk offered a nuanced perspective, stating that the situation in Venezuela has not been the primary direct driver. They observed that while political uncertainty typically triggers panic selling, no such trend was evident. The arrest of Venezuela's President Nicolás Maduro is seen more as a symbolic event refocusing attention on geopolitical risks rather than a direct bullish trigger.
Nischal Shetty, Founder of WazirX, emphasised that the key factor for Bitcoin's price trajectory this year remains the US Federal Reserve's interest rate decisions. "Right now, everything related to Bitcoin can be expected to be influenced by inflation and the Fed," Shetty explained. He added that geopolitical events will only significantly matter if they push energy prices high enough to alter inflation data and affect the Fed's policy timeline.
The Venezuela Bitcoin Reserve Factor
Akshat Siddhant, Lead Quant Analyst at Mudrex, highlighted an intriguing angle: cryptocurrencies and gold are being treated as safe-haven assets amid the US-Venezuela tensions. He pointed to reports suggesting the US government could potentially seize Venezuela's Bitcoin reserves. "Any developments around the US gaining control over Venezuela-linked Bitcoin reserves could further strengthen market sentiment," Siddhant noted. He believes a decisive breakout above $94,700 could accelerate Bitcoin's move toward the psychological $100,000 mark.
Shetty commented on this possibility, stating that such a seizure might cause short-term volatility based on trust issues but would not fundamentally alter Bitcoin's supply. He drew a parallel to the historical confiscation of gold, suggesting it could fuel growing interest among nations to add Bitcoin to their monetary reserves.
Market Outlook: Caution Amidst Optimism
Despite the sustained momentum, analysts advise caution. The CoinSwitch desk pointed out that spot trading volumes for Bitcoin and altcoins have dropped to their lowest levels since November 2023, indicating limited participation from spot traders despite higher prices. "It is still early to conclude that market sentiment has structurally shifted," their analysis stated.
They view the coming days as critical, particularly regarding US geopolitical developments. The best-case scenario, in their view, involves Bitcoin consolidating in the $93,000–$94,000 range before gradually testing the resistance near $95,000.
Sehgal provided a technical outlook, noting that Bitcoin's breakout above its 200-day Exponential Moving Average (EMA) on the 4-hour chart signals short-term bullish momentum, with resistance near $94,500 and support around $91,800. Siddhant added that growing concerns over the record US national debt are strengthening Bitcoin's appeal as a long-term hedge, though upcoming macro data will be key for near-term momentum.
Overall, the market tone remains constructive, supported by institutional activity, regulatory progress, and a broader risk-on environment, positioning crypto assets for potential continued gains.
