Bitcoin Breaks Above $21,000 Amid Inflation Optimism, FTX

(Bloomberg) – Bitcoin jumped over $21,000 on Saturday amid optimism that it may have bottomed and inflation may have peaked.

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The largest cryptocurrency rose 7.5% to $21,299. It hadn’t topped $20,000 since Nov. 8, and Saturday marked its 11th consecutive day of gains. The second-largest Ether jumped 9.7%, and other tokens like Cardano and Dogecoin also saw strong gains. The overall market capitalization of the crypto universe topped $1 trillion for the first time since early November, according to data from CoinGecko.

The gains came amid a consumer price report last week that showed January inflation falling from December levels. The Federal Reserve is on track to downgrade to lower interest rate hikes in the wake of this further cooling, although it is expected to continue to rise until price pressures show more definitive signs. of slowing down. That helped boost risky assets like the Nasdaq 100 stock index, which has gained for six straight days.

“Crypto-assets performed well after the soft CPI print, suggesting that crypto’s correlation to the macro isn’t going away anytime soon,” said Sean Farrell, head of digital asset strategy. at Fundstrat. “Price tracking this week is certainly encouraging,” and barring any forced liquidations from struggling crypto firm DCG “there is a strong likelihood that the absolute bottom will be reached for crypto prices” .

Bitcoin price was stuck in a tight range around $16,000-$17,000 for weeks before this latest breakout. The upside moves surprised shorts — crypto short liquidations have topped $100 million in five of the past six days, according to data from Coinglass. Saturday’s total was the highest, topping $296 million.

“The decline in CPI coupled with the news that FTX liquidators recovered $5 billion in liquid assets has given crypto markets plenty to overlook the macro picture, which is still bearish,” said said Hayden Hughes, managing director of social trading platform Alpha Impact. , said Saturday in a message. “Markets have a lot of positive momentum heading into the next FOMC meeting later this month.”

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