Bitcoin was trading around $58,000 as of 6:00 GMT on Thursday, up about 5% from the previous close.
It dipped below $55,000 briefly on Wednesday, after trading in a tight range over the past few days.
Some analysts claim the current rally is driven by increased speculation around the possibility of a bitcoin exchange-traded fund (ETF); which could spring up if greenlighted by the US Securities and Exchange Commission (SEC) as early as this week.
However, many are skeptical whether the approval will have a beneficial effect on bitcoin’s price.
Crypto analysts say the extreme buying in the market could mean the rally may soon run out of steam.
According to the Fear & Greed Index, a tool used by investors to gauge whether the market is fairly priced, bitcoin entered ‘extreme greed’ territory last week, and is at the highest level since early September; which preceded a sharp sell-off and may signify another one approaching.
The cryptocurrency is still about 8% below its all-time high of around $65,000 in April; but has nearly doubled in price since the July low of under $30,000.