Bitcoin Returns To Hover Above $41,000 Mark, Its 19-Month High: Will The Rise Continue? The world's most popular cryptocurrency Bitcoin has bounced back and has returned to hover above its $41,000 mark for the first time since May 2022. Since early October, Bitcoin has rallied by more than a third.
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After undergoing a tumultuous period, the most popular cryptocurrency, Bitcoin has bounced back and has returned to hover above its $41,000 mark for the first time since May 2022. Since early October, Bitcoin has rallied by more than a third, snapping out of a multi-month period of subdued trading and fueling calls of a new crypto bull market. With this, the overall crypto market cap has surged to $1.54 trillion mark, its highest point in 2023. Even crypto currency Ethereum showed its best performance and breached the $2,200 mark.
The surge has come on the back of the expectation that interest rates have reached their peak and could come down as soon as next March
Ryan Lee, Chief Analyst, Bitget Research, said, "At the macro level, anticipation of interest rate cuts by the Federal Reserve has propelled commodity prices higher, with gold hitting historic highs and Bitcoin rebounding by nearly $15,000 over the past month. Given the potential for a recession in the US economy, fund managers are predicting an 80% consensus level for a trend of interest rate reduction in 2024, marking the highest consensus level ever recorded. The crypto market has already factored in this positive news.
In the crypto market, Bitcoin has surpassed $40,000 without encountering significant resistance. Within 24 hours, short positions on Bitcoin contracts worth $54 million were liquidated, significantly weakening the bearish forces. The market may undergo an overall accelerated upward revision. Furthermore, a new asset category within the Bitcoin ecosystem, ORDI, surged over the weekend, indicating a strong speculative sentiment in the market.
Reacting to this development, Shivam Thakral, CEO, BuyUcoin, said, "The crypto market is witnessing its best performance since May 2022. The US Fed is expected to cut the interest rate in 2024 and that may boost the liquidity in the market, we may be witnessing early signs of the same."
Apart from this, experts feel that the US Committee on Financial Services' December 8 hearing on digital assets may lead to a strong regulatory framework focussing on investor protection, which could prove highly beneficial for the broader digital asset market. "The growing optimism around Bitcoin ETF approval will continue to create waves of positive sentiments within the global digital asset community and we can expect this momentum to sustain in the coming weeks," adds Thakral.
According to Rajagopal Menon, Vice President, WazirX, Bitcoin's price crossing the 41,000 hurdle can be attributed to a marked increase in spot market buying. "Substantial acquisitions are being made by HNIs, often referred to as 'whales'. This is seen on-chain data, which shows that two major players have been actively purchasing Bitcoin in significant volumes, particularly around the $40,000 to $41,000 range."
To hit $100,000?
While the cryptocurrency is still below its high of over $69,000, recorded on Nov. 10, 2021, it is expected to reach $100,000 by the end of 2024, according to Standard Chartered's price forecast, owing to the anticipated surge to the approvals of multiple Exchange-Traded Funds (ETFs). "The sentiment is upbeat because the buzz is that the Bitcoin ETF could be approved as early as in the by Jan 15, 2024. The market is buzzing with optimism as it is a catalyst for wider institutional acceptance and integration of Bitcoin into mainstream financial portfolios,"ādds Menon.
The halving of Bitcoin in early April next year may also contribute to further increase in the prices (where block reward will be reduced from 6.25 Bitcoin per block to only 3.125 Bitcoin). "Its an event historically associated with price increases due to the resulting supply shock," shares Menon.