What happened?
The price of Bitcoin (BTC) briefly surpassed $71,000, reaching a new high since June this year, just 5% away from its all-time high of $73,700.
With the strong inflow of funds into Bitcoin spot ETFs, the overall market sentiment has been boosted. According to a report from data provider CoinShares, Bitcoin saw a total inflow of $920 million in the week ending October 25, providing a boost to the price of Bitcoin.
The announcements of interest rate cuts by many countries, a new round of large-scale funds flowing into spot ETFs, and an increase in the probability of Trump’s victory have all been catalysts for the recent market rally.
Bitcoin returns to the $70,000 level!
Since June this year, the cryptocurrency market has been performing poorly, and after the price dropped to the $53,000 range in early September, Bitcoin has remained relatively inactive, leaving many investors wondering if the promised bull market has come to an end.
However, in just a few days this week, Bitcoin has finally emerged from the four-month-long consolidation phase, further challenging the recent high predicted by the market.
According to data from CoinGecko, Bitcoin has risen by 5% in the past 24 hours and has broken through the key resistance level of $70,000, with a trading volume of $48 billion, almost twice the volume on Monday.
Looking at the trading chart, it can be seen that after briefly dropping to the bottom of the $66,510 range in early October, Bitcoin quickly rebounded. This rebound is accompanied by the 50-day moving average crossing above the 200-day moving average, forming a “golden cross,” indicating the potential for further price increases and causing excitement within the community.
Trump’s election prospects and interest rate focus provide support for Bitcoin prices
The US presidential election has become another major factor affecting Bitcoin prices recently. According to data from blockchain prediction market Polymarket, the probability of Republican candidate Trump’s victory has risen to 66%, higher than the previous 61%.
Market experts believe that Trump’s cryptocurrency-friendly stance is one of the reasons why investors are more willing to support Bitcoin. In fact, as the election draws near, the blockchain market has shown an increasing voice in support of Trump, with investors expecting that a Republican administration may further open up policies for digital assets.
Although stablecoin issuer Tether has recently faced an investigation by the Department of Justice, causing a temporary drop in Bitcoin prices, it quickly rebounded.
This wave of Bitcoin’s rise is also supported by other factors, such as Tesla CEO Elon Musk’s support at Trump events, which has once again attracted attention to Bitcoin and the cryptocurrency Dogecoin (DOGE), driving expectations of favorable policies for the cryptocurrency market after the Republican candidate is elected.
Musk even posted on the X platform, jokingly saying he is willing to work for the “Department of Government Efficiency” and abbreviated it as “D.O.G.E,” sparking renewed interest in Dogecoin and causing a 10% increase after the event.
In addition, recent interest rate cuts by central banks in many countries, coupled with China’s large-scale monetary and fiscal stimulus measures, may also be key factors driving the rise in the cryptocurrency market.
It is worth mentioning that the price dynamics of Bitcoin this time are similar to the trend before and after the 2020 US election. At that time, the market was also in a slump, but shortly after the election results were announced, Bitcoin experienced a significant increase and grew by 120% from November to the end of the year.
Matthew Sigel, Head of Research at asset management company VanEck, said that there is a similar expectation this time as well. “We saw the exact same pattern in 2020 when the Bitcoin market was in low volatility, but after the announcement of the election winner and new buyers entering the market, there was a quick rebound in high volatility.”
Sigel believes that the upcoming election will likely continue to provide opportunities for Bitcoin to rise.
References:
cointelegraph, coindesk, coindesk, coindesk
