The cryptocurrency market experienced a dramatic start to the week, with Bitcoin leading the headlines. The digital asset faced intense volatility, dropping from $96,000 to under $90,000 in just hours, marking its lowest point at $89,294 on the Crypto exchange since November. However, the sudden downturn was short-lived as Bitcoin rebounded swiftly, reaching $97,000 by Tuesday.
The market then awaited the critical Consumer Price Index (CPI) report on Wednesday. Once the CPI figures were released, Bitcoin’s value surged rapidly. Within minutes, its price climbed from $97,000 to $98,500 and continued to rise, hitting a weekly high of just under $102,200.
Following this peak, Bitcoin experienced a slight pullback, stabilizing around $99,000. Its current market capitalization stands at $2 trillion, although its dominance has dropped to 56.3% as altcoins regain momentum.
Altcoins Rebound as Market Sentiment Improves
The recent price movements extended to the altcoin market, where major tokens recorded gains. For instance, Ethereum regained ground after falling below $3,000, now trading above $3,371. Popular tokens such as DOGE have also climbed above $0.38, with AVAX in the $41 region and TRX approaching $0.25. Additionally, LINK has risen to over $21, now at $24.07, a 10.56% daily gain.
Larger-cap altcoins, including XRP, SOL, and HBAR, showed robust upward movements, contributing to the market’s renewed optimism. FARTCOIN emerged as the day’s best-performing altcoin among the top 100, recording a 20.57% increase. Following closely, VET registered a 17.71% gain, while EOS rose by 17.40%. These surges pushed the total market cap of all cryptocurrencies above $3.57 trillion, marking a $430 billion recovery from earlier lows.
Moreover, the cryptocurrency market cap has reclaimed its 50-day Moving Average at $3.37 trillion, signaling robust support levels. Analysts are eyeing the next key resistance point at $3.54 trillion, last tested on January 6, 2025. If the upward momentum persists, the market could see further gains in the days ahead.
Economic Data Drives Crypto Momentum
The December U.S. CPI report was pivotal in the market’s positive trajectory. In this case, the headline CPI rose 0.4% month-over-month, meeting expectations and bringing the annual rate to 2.9%, the highest since July 2024. On the other hand, Core CPI increased by 0.2% monthly, bringing the annual rate to 3.2%, the lowest since August 2024.
These metrics signaled a potential pause in Federal Reserve rate hikes, boosting sentiment for risk-on assets like cryptocurrencies. Heightened liquidations, totaling over $347 million in the past 24 hours, further influenced market dynamics. Of this amount, $212 million stemmed from short positions, with Bitcoin alone accounting for $58.42 million.
These liquidations forced traders to cover leveraged positions, adding buying pressure and increasing prices. Moreover, the anticipation surrounding President-elect Trump’s inauguration on January 20 has also bolstered market confidence. Speculation about crypto-friendly policies, including the potential establishment of a U.S. Bitcoin strategic reserve, has fueled a bullish outlook among investors.
Also Read: Is Litecoin Price Ready to Exit Its 1000-day Accumulation Phase?
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