Following Bitcoin's 19% Surge, Crypto Explodes: Is Bull Market in the Works?

Bitcoin's price recorded an impressive 19 percent rally from $4,200 to nearly $5,000 while market capitalization increased by $20 billion within the span of an hour.

In the past month, fueled by the strong performance of crypto assets and alternative cryptocurrencies, the valuation of the crypto market rose by more than $40 billion from $125 billion to $166 billion.

The cryptocurrency market needed considerable stimulus to pass the $4,200 resistance level, which in itself required buyers to absorb an $80 million sell wall.

The rally in the price of bitcoin following weeks of strong upside movement by alternative cryptocurrencies was somewhat expected.

Some technical analysts were anticipating that investors cash out their returns from high-risk trades back into bitcoin.

Initially, only bitcoin recorded strong gains on early Tuesday morning as capital flowed back into BTC from altcoins.

By evening, both bitcoin and alternative cryptocurrencies began to surge simultaneously, suggesting that a new inflow of capital is triggering the recovery of the crypto market.

"There's an estimated $2 billion in cash sitting at crypto funds/holdcos. There's another $2 billion+ sitting in stablecoins, and another $2 billion sitting at exchanges/silvergate/signature. This is $6 billion in fiat already onboarded to crypto to buy your bags. Imagine thinking we need new money to hit $10,000."

If the funds on the sidelines of the cryptocurrency market move, considering that the overwhelming majority of bitcoin volumes are inflated and that the real daily volume of bitcoin is estimated to be below $1 billion, it could help fuel the momentum of both BTC and the rest of the cryptocurrency market.

Assets such as Bitcoin Cash, Litecoin, and EOS recorded gains in the range of 15 to 33 percent, with BCH leading the market as the best performing cryptocurrency of the day.