Bitcoin
and other cryptocurrencies advanced Friday, bouncing back after a selloff earlier in the week and pushing close to recent highs. Market participants see more gains ahead, and seasonality may be on Bitcoin’s side.
The price of Bitcoin has risen 2% over the past 24 hours to above $37,950, nearing the $38,000 level at which prices recently have failed to consolidate and which marks Bitcoin’s highest point since cryptos plunged into a brutal bear market in May 2022. The largest digital asset has resumed a rally that has carried prices more than a third higher since early October, brushing off a selloff earlier in the week after crypto exchange giant Binance and its CEO copped to anti-money-laundering violations.
“Bitcoin has tried and failed to breach $38,000 three times in the past two weeks and the challenge seems formidable, at least on a symbolic basis,” said Antoni Trenchev, co-founder and managing partner at crypto lender Nexo. “If and when Bitcoin slices through $38,000, it should only be a matter of time before $40,000 is taken out, but questions remain about the need for a healthy pullback given we haven’t seen a daily double-digit decline in Bitcoin since August 17.”
Multiple factors have supported a rise in Bitcoin prices, including optimism that U.S. regulators will soon approve the first spot Bitcoin exchange-traded fund (ETF), which is expected to usher in a fresh wave of investor interest. Rising expectations that the Federal Reserve will cut interest rates multiple times next year has also provided support for tokens alongside other risk-sensitive assets, with the
Dow Jones Industrial Average
and
S&P 500
also marching higher of late.
Moreover, analysts see tight token supply dynamics and seasonality—with Bitcoin, like stocks, tending to do well into the end of the year—as a source of hope for more gains.
”What’s very encouraging for Bitcoin right now is 70% of on-chain supply has remain dormant for a year, a new record which tells us long-term Bitcoin holders are steadfast in their determination and little it seems will shake their resolve until prices are much higher,” said Trenchev. “Bitcoin is on track for its third consecutive monthly gain, and the last time it rose September through November in 2015 and 2016 it went on to log another positive month in December.”
Beyond Bitcoin,
Ether
—the second-largest crypto—gained 2% to above $2,100. Smaller tokens or altcoins were also buoyant, with
Cardano
climbing 2% and
Polygon
up 1%. Memecoins similarly advanced, with
Dogecoin
rising 2% and
Shiba Inu
1% higher.
Write to Jack Denton at jack.denton@barrons.com
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