Bitcoin crosses US$41,000 mark for the 1st time since May 2022

Bitcoin has done it again. The popular crypto asset has has broken above $40,000 for the first time since May 2022 even as it rides a wave of momentum on the upbeat news about US interest rate cuts and traders bet on the forthcoming approval of US stock market-traded bitcoin funds. The overall crypto market cap has surged to $1.54 trillion mark owing to the broader crypto rally.

This $40,000 price level might serve as the new starting point for the forthcoming bull market, says Ryan Lee, Chief Analyst of Bitget Research.

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

Ryan Lee, Chief Analyst of Bitget Research

“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,” he says.

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,” he adds.

Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, says the crypto market is witnessing its best performance since May 2022 with Bitcoin and Ethereum breaching the $41,000 and $2,200 mark respectively.

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

Shivam Thakral, CEO of BuyUcoin

“The latest rally has taken the total crypto market cap to the $1.54 trillion level which is at its highest point in 2023. 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,” he says.

He also adds that the US Committee on Financial Services calling a 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.

Read more: Crypto regulation & Indian financial markets: A change towards compliance

“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,” he says.

As the crypto community rejoices, it remains to be seen how long the current upbeat momentum lasts.