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(Bloomberg) -- Bitcoin climbed above $30,000 for the first time since June, bolstered by bets on easier monetary policies that have made cryptocurrencies standout performers this year.

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Bitcoin is now up 82% since Dec. 31, handily beating the tech-heavy Nasdaq 100s 19% gain. Gold, another investor favorite this year, has climbed around 10%. Cryptos rapid ascent has seen Bitcoin vault past where it stood when hedge fund Three Arrows Capital imploded last summer yet it remains more than 50% below its all-time high in November 2021.

30K is obviously a psychological magnet now, said David Brickell, director of sales at Paradigm. The bigger question is why is BTC not higher, he said, adding that the coin looks to be ready to take the next leg higher.

Underpinning Bitcoins partial comeback are expectations that the banking crisis that erupted in the US in March will force the Federal Reserve to hit pause on rate increases. Thats boosted the view among Bitcoin bulls that the token stands to gain from lower real interest rates, and that it offers shelter from turmoil in traditional finance.

This rally may, in part, be driven by the expectation that rate hikes are almost done, but some groups of investors are drawn to crypto because its an asset outside of traditional banking and finance, said Bradley Duke, co-chief executive officer of crypto exchange-traded product provider ETC Group.

Digital assets over the past two sessions broke out of weeks of range-bound trading, with analysts also citing technical factors as having given the token a nudge. But hanging over the rally is persistently low liquidity, which bears say distorts pricing and could cause a rapid reversal should central banks stand firm on battling inflation.

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30K is very significant for both technical and fundamental reasons, said Mati Greenspan, Quantum Economics chief executive officer. The resistance has been building up for three weeks straight and has now finally broken.

Bitcoins breakout above stiff resistance at $30,000 comes after a so-called squeeze of the Bollinger Band, which saw historical volatility fall to the lowest since January. The compression back then resulted in a sharp move upward that looks similar to Tuesdays upside breakout. Traders following technical patterns may now be looking at the $30,800 area as a first potential objective, followed by $31,200.

Punching past those levels would take Bitcoin close to another psychologically important threshold: erasing all losses since the tumultuous unwinding of the TerraUSD stablecoin in early May. That event set the stage for a deep market swoon and the demise of some of cryptos best-known names, from 3AC to lender Celsius Network and exchange FTX.

The return is there, so its still attractive if youre trying to generate 20%, 30% or even something higher if youre willing to hold the coins for longer, said Brandon Mulvihill, CEO at Crossover, a cryptocurrency trading venue for institutional investors.

Read about the arrest of TerraUSDs backer Do Kwon

To be sure, the crypto industry as a whole faces immense scrutiny.

Crypto exchange Coinbase Global Inc. said it has received a notice from the Securities and Exchange Commission declaring its intention to bring an enforcement action. The SEC has sued crypto mogul Justin Sun for allegedly violating securities rules in a case Sun said lacks merit.

And elsewhere, the US Commodity Futures Trading Commission has sued Binance founder Changpeng Zhao and his crypto exchange for alleged violations of derivatives regulations, though Binance has said it doesnt agree with many of the agencys characterizations.

But even with the setbacks, Bitcoins rally has gained strength over the past month following the collapse of three US banks, which revived the narrative among Bitcoin bulls that the token offers a more attractive alternative to traditional finance.

Furthermore, analysts say a drop in liquidity to a 10-month low after market makers lost access to US banking rails provided by Silvergate Capital Corp. and Signature Bank could also explain the rebound, at least in part. With lower trading volume, price swings can look more dramatic.

Order books are thin and trading activity is depressed, said Strahinja Savic, head of data and analytics at FRNT Financial. Under these circumstances, it is possible that we see price action that is difficult to pin to any one reason.

--With assistance from Akshay Chinchalkar and Brett Miller.

(Updates with comments from executives, updates prices.)

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Bitcoin Rallies Past $30,000 Mark for the First Time Since June - Yahoo Finance