Bitcoin’s price had been trading at the $40,000 level in recent days, but it finally broke through that level on Sunday to trade above $40,600 as of press time, according to CoinDesk Indicies data, a 24-hour rise of about 3%. Ethereum was trading at $2,205, a similar 100 percent rise over the past 24 hours. Most of the other top 10 coins by market cap had smaller gains, although BNB, a Binance token, fell about 0.1% over the past day.
Likewise, Ethereum has not traded above $2,200 since May 2022, although it has come close several times.
CoinDesk reported earlier this week that bitcoin holders withdrew 37,000 bitcoin between November 17 and December 1, suggesting they were taking direct custody of their coins.
The move comes days after gold futures reached a record high of $2,087 after Federal Reserve Chairman Jerome Powell said interest rates were now in restricted territory.
“The market is increasingly anticipating interest rate cuts next year, and investors are growing more optimistic about the outlook for Bitcoin ETF orders by some of the biggest names in asset management,” Lucy Hu, senior analyst at Metalpha, wrote in a note. “This is an official statement that the market is bullish and the price may see further rises in the coming weeks.”
Powell’s comments played into the narrative that the tightening cycle has peaked, pushing bond yields lower.
“Cryptocurrencies, on the other hand, have been moving well, along with gold, on the back of lower yields,” cryptocurrency data provider Amberdata said in a newsletter on Sunday.
“Bitcoin has been keen to jump higher, and even without the headlines of spot ETF catalysts, the market is looking to buy,” Ambardatta added.
Traders have loaded upside options trades in recent weeks, betting that Bitcoin will eventually rise to $45,000 by the end of March 2024.
Next week US Services Purchasing Managers’ Index (PMI) and non-farm payrolls data for December will be released. A strong non-farm payrolls number could unwind bets of a 2024 Fed rate cut, slowing Bitcoin’s rise.
“Devoted student. Bacon advocate. Beer scholar. Troublemaker. Falls down a lot. Typical coffee enthusiast.”