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As a bleak first quarter draws to a close, crypto seems to have the wind in its sails. It has pushed through the US$2-trillion barrier and is proving surprisingly resilient amid global chaos.

At Monday’s high of US$47,765, market leader bitcoin broke above the narrow US$34,000-$44,000 range it’s traded in for most of 2022. Through a steady grind higher from a low just above US$40,000 on March 21, it has gained 18 per cent.

Its comparative steadiness, versus previous performance at least, contrasts with stock markets, traditional currencies and even safe-haven gold, which have been shaken by the Russian invasion of Ukraine as well as the Federal Reserve’s tightening.

Bitcoin’s jumpiness has waned of late.

Its 30-day volatility is around 4 per cent, about two-thirds the level it was in June, 2021, according to futures trading platform Coinglass. The highest this year was 4.56 per cent on March 16.

This measures its deviation from its own standard levels, and bitcoin has still had wild swings, such as a 17-per-cent jump on March 1. But it’s distinctly tamer than in 2021 when it could move as much as 40 per cent in a day.

By comparison, the tech-heavy Nasdaq has whipsawed 5-6 per cent on numerous days in 2022, and was down 20 per cent for the year as of March 14, before it rallied to cut half that loss.

“The largest conflict we’ve seen in Europe since World War Two has really rocked global markets,” said Pierce Crosby, General Manager at charting platform TradingView in New York.

“What we have seen across other major assets is a huge fallout - from both the U.S. equity markets as well as global markets,” he added. “Bitcoin has more or less stayed in a pretty tight range ... but actually, in terms of the relative strength, it’s very bullish.”

$2-TRILLION CRYPTO

The total value of the cryptocurrency market rose above US$2-trillion on Friday, according to analytics platform CoinMarketCap. To put that in context, the market briefly hit US$3-trillion on Nov. 10, when bitcoin reached US$69,000.

The meandering climb back above US$2-trillion has been slow and has also been helped by a mushrooming in coins and tokens - the number CoinMarketCap counts has risen by almost 5,000 since November to stand at 18,511 cryptocurrencies.

Bitcoin’s market capitalization has reached US$902-billion, but it still has a ways to go to reclaim the US$1-trillion it commanded in November. While still the dominant crypto, its market share has also fallen gradually from as much as 70 per cent of the total capitalization in early 2021 to 42 per cent now.

WHAT LIES AHEAD?

Many a crypto investor has thought they could divine bitcoin’s direction before the fickle cryptocurrency left them sprawled in the financial dust.

“Although bitcoin is remaining strong in the short term, rising oil prices increase the likelihood of a recession over the coming year or so,” said Marcus Sotiriou, analyst at U.K.-based digital asset broker GlobalBlock.

“Oil has increased by around 25 per cent in the past six days alone, and bitcoin bulls will want to see this tail off for continued strength.”

That said, certain other technical factors are pointing to bitcoin bullishness.

Funding rates, which measure the cost of holding bitcoin via futures, have turned marginally positive after being negative for most of this year, indicating investors are prepared to pay to be long. It stands at 0.003 per cent on analytics platform CryptoQuant, though still below a peak of 0.06 per cent hit in October.

Coinglass’s longs-to-shorts ratio has also climbed from 0.95 on March 20 to 1.1, the highest level in at least four weeks.

Blockchain data provider Chainalysis said an increasing proportion of bitcoin – nearly 60 per cent of total supply – was being held for longer than 52 weeks, up from 54.72 per cent in the past 25 weeks.

Yet Ashwath Balakrishnan, vice president of research at Delphi Digital in Bengaluru, India, cautioned that it was difficult to identify a lasting market direction.

“Everyone’s a little cautious,” he said. “If [bitcoin] rejects off of $46k and goes back down then it probably means we’re stuck with range-bound conditions for at least another month or so.”

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