After testing the $40,000 resistance level in the past few days, Bitcoin’s price finally broke through and reached $40,600 on Sunday, a first since May 2022. This also represents a three percent increase over the past 24 hours.
This significant milestone has injected renewed vigor into the cryptocurrency sector, with trading volume surging to $23 billion within the past 24 hours. Around $15 million in short liquidations further fueled this rally.
From November 17 to December 1, Bitcoin holders withdrew 37,000 BTC, valued at approximately $1.4 billion. This reflects a bullish sentiment among investors.
Bitcoin’s recovery was driven by conciliatory remarks from Federal Reserve officials. Chairman Jerome Powell’s comments, in particular, fueled expectations of a paused tightening cycle, leading to a decline in bond yields.
At the same time, the prospect of a U.S. spot bitcoin exchange-traded fund (ETF) approval fosters optimism. Grayscale and seven other applicants for spot Bitcoin ETFs have engaged in crucial discussions with the U.S. Securities and Exchange Commission (SEC).
The discussions cover technical aspects—such as in-kind versus cash redemption mechanisms—and broader regulatory considerations. They signal a growing interest and a potential shift in the SEC’s regulatory approach towards cryptocurrency ETFs.
“We are potentially entering in 2024 an opportunity for a net positive liquidity for the markets,” said Anthony Rousseau, head of brokerage at TradeStation, in an email with CoinDesk.
“Bitcoin is a pure reflection of net liquidity in the markets, and we would need to see positive liquidity to support any substantial bullish activity.”
Bitcoin’s halving event in 141 days also drove the market’s bullish sentiment. These events, which reduce the supply of new Bitcoins, have historically preceded substantial price rallies. The upcoming halving could be a catalyst for sustained growth and long-term value appreciation in Bitcoin.
Bullish traders are now anticipating Bitcoin to potentially surge to $45,000 by the end of March 2024.
Other affected cryptocurrencies
Bitcoin surged past the $38,800 mark early Friday, triggering a wave of gains across the cryptocurrency market. Several major tokens experienced notable increases, with some jumping as much as five percent in the past 24 hours.
Ethereum mirrored Bitcoin’s ascent, climbing to $2,205. While most other top ten cryptocurrencies by market cap recorded modest gains, BNB coin bucked the trend, dipping by 0.1 percent over the past 24 hours.
Solana topped the weekly leaderboard with a 9.51 percent surge, followed by Dogecoin’s eight percent gain. Chainlink also witnessed a seven percent increase.
Toncoin surged 2.2 percent following the announcement that KuCoin Ventures would provide funding to bolster the development and expansion of the TON ecosystem. Cardano rounded out the top ten gainers with a modest 0.4 percent increase.
Apart from the top 10 cryptocurrencies, several notable mentions also witnessed notable gains last week. Luna Classic spearheaded the rally with a 97 percent increase, followed closely by IOTA’s 82 percent gain. ORDI also experienced a significant 56 percent increase, leading it to accumulate a 471 percent monthly gain.
Overall, the cryptocurrency market capitalization surpassed $1.5 trillion, reaching a level last seen in May 2022.
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