Bitcoin (BTC) soared past $61,000 during early Asian trading hours on Wednesday, spearheading a rally among major cryptocurrencies and recovering from earlier losses. This recent surge, which saw Bitcoin climb over 3%, has reignited speculation about the possibility of the cryptocurrency reaching $70,000. Other major tokens also experienced notable gains, with Ethereum (ETH), Solana’s SOL, Cardano’s ADA, XRP (XRP), and BNB Chain’s BNB rising up to 2.8%. In contrast, memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB) saw more modest increases of around 1%, indicating that investors are currently leaning towards less speculative assets.

This upward momentum in Bitcoin raises intriguing questions about its potential trajectory. The possibility of Bitcoin hitting $70,000 is increasingly plausible if the current rally continues. Bitcoin’s recent performance has already outpaced the 2.45% gain in the broader CoinDesk 20 (CD20) index, which tracks the largest tokens by market capitalization, excluding stablecoins. Such performance hints at a strengthening bullish trend that could drive Bitcoin toward new highs.

Despite the optimistic outlook, market participants are navigating a complex landscape. The week’s economic data and potential market disruptions pose risks to the ongoing rally. “Investors are staying cautious ahead of the US CPI report this week,” noted crypto trading firm QCP Capital in a Telegram update. “They are closely monitoring inflation data for clues on whether the Fed will cut rates by 50 or 25 basis points in September. The odds are now evenly split.”

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Wednesday’s recovery provided a much-needed boost for traders who had been grappling with losses after a significant 20% market-wide drop earlier in August, largely due to the unwinding of the yen carry trade. This unwinding has left some strategists cautious about further market movements. Richard Kelly, head of global strategy at TD Securities, expressed skepticism about declaring the end of the carry trade unwind in a CNBC interview. “I’d challenge many of the prevailing narratives. We lack concrete data to price carry trades accurately,” Kelly stated. “There’s still significant potential for further unwinding, especially given the undervaluation of the yen.”

As Bitcoin continues to gain ground, the cryptocurrency’s journey toward $70,000 remains a topic of intense interest. While current trends are promising, the interplay of economic indicators and market sentiment will be crucial in determining whether Bitcoin can break through this significant threshold.