Bitcoin
and other cryptocurrencies jumped on Monday, with the largest digital asset hitting a 20-month high.
The price of Bitcoin rose 4% over the past 24 hours to near $41,400, blowing past the $39,000, $40,000, and $41,000 levels—in a surge over the weekend that has taken Bitcoin to its highest point since April 2022.
Bitcoin has gained more than 50% since mid-October, snapping out of a long lull. The last time prices were so high was just before the Terra stablecoin network collapsed, touching off a brutal bear market.
“While Bitcoin is overbought on daily timeframes, this is not necessarily a reason for a correction,” said Alex Kuptsikevich, an analyst at broker FxPro. “Technically, up to $46,000 is thin-air territory for Bitcoin, and price swings between $40,000 and $46,000 can be pretty wild.”
Bitcoin has even vastly outperformed the red-hot
Dow Jones Industrial Average
and
S&P 500,
which have been on a roll since late October, driven by crypto-native and macroeconomic catalysts alike.
The major force behind Bitcoin’s gains has been hopes that regulators will soon approve the first spot Bitcoin exchange-traded fund, which experts predict would usher in a fresh wave of investor interest in digital assets.
Increasing expectations that the Federal Reserve will cut interest rates multiple times next year—a macro backdrop that has also lifted stocks—has helped matters, with lower rates tending to benefit riskier bets like Bitcoin and tech stocks.
So, the question: Where does Bitcoin go from here? While there are few fundamental drivers of the price—beyond supply and demand—analysts suggest the rally has more room to run.
From a technical market perspective, Bitcoin has momentum in a range that has historically proved volatile.
More broadly, while the token risks going into overbought territory, trading data suggests volume is still relatively depressed so there are still many traders that could step into the fray.
“The first cryptocurrency can move for many more days, drawing more and more layers of investors into FOMO,” said Kuptsikevich.
FOMO, or the fear of missing out, is one of crypto’s most powerful trends.
With evidence that many retail and institutional traders remain on the sidelines, the gains of late could lure more of them to buy.
More demand paired with a tight Bitcoin supply—many long-term holders are sitting on coins that they haven’t been willing to sell—and prices could go higher still.
“The rally has left a lot of interested parties on the sidelines who are likely to become involved later,” said Alex Thorn, head of research at crypto financial services firm
Galaxy Digital.
“Despite the run, Bitcoin remains very constructive.”
Ether,
the second-largest crypto, rose 3% to $2,220. Smaller tokens or altcoins were more mixed, with
Cardano
climbing 3% and
Polygon
1% lower. Memecoins were more buoyant:
Dogecoin
jumped 5% and
Shiba Inu
surged 6%.
Write to Jack Denton at [email protected]
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