Bitcoin Shows Strong Momentum Despite Lack of Catalysts
The price of Bitcoin has experienced a 3% rise in the past 24 hours, surpassing $43,950. This marks the highest level in ten days, although it falls slightly short of the recent peak near $44,500 observed in April 2022. Despite some choppy trading and a rangebound market in recent days, Bitcoin has surged over 50% since mid-October, leading many to believe that a new crypto bull market is underway.
Experts suggest that the current sideways trend is to be expected after a massive bullish phase, as stated by Rachel Lin, CEO of the trading platform SynFutures. Lin adds, "Overall, the market remains in a consolidation phase, which inevitably follows a massive bullish phase like we saw in November."
One of the key drivers behind the momentum of digital assets is the anticipation of U.S. regulators approving the first spot Bitcoin exchange-traded fund (ETF). This approval is speculated to occur as early as January, potentially attracting a fresh wave of investor interest. Considering that token supply remains historically tight, this increased demand could result in significant price surges.
In conclusion, despite the absence of major crypto catalysts, Bitcoin and other cryptocurrencies continue to show strong momentum heading towards the end of the year. With the potential approval of a spot Bitcoin ETF in sight, market sentiment remains positive for digital asset prices.
Expectations of Fed Rate Cuts Support Bitcoin's Rise
Bitcoin has received a substantial boost from the anticipation of multiple interest rate cuts by the Federal Reserve next year. This surge in Bitcoin's value has paralleled the gains of the Dow Jones Industrial Average and S&P 500, reflecting a macro environment conducive to risk-sensitive assets.
Looking ahead, the Securities and Exchange Commission's impending decision on a spot Bitcoin ETF after New Year's Eve adds further intrigue to the crypto market. With little significant economic data expected until Friday's inflation figures, the holiday season presents a dearth of catalysts for crypto. However, traders maintain an optimistic outlook, as demonstrated by robust bullish sentiment in the crypto derivatives market. There is a continued belief that Bitcoin could surpass the $50,000 mark in the coming weeks and months.
Market indicators reveal this positive sentiment. According to Lin, the put-call ratio is skewed in favor of calls. This means that there is a higher expectation of upward potential than downward risk in the market. Notably, the top 10 options with the highest open interests are all calls. In the options market, calls represent wagers on price increases, while puts indicate bets on price declines.
In addition to Bitcoin's ascent, Ether, the second-largest cryptocurrency, has risen by 2% to $2,260. Other smaller tokens or altcoins have also experienced gains, with Cardano witnessing a 3% climb and Polygon surging by 2%. Memecoins like Dogecoin and Shiba Inu have also displayed strength, with both seeing a 2% increase.
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