Bitcoin Continues Rally, Breaking $31,000 Mark
Bitcoin’s price has experienced a sustained rally for the second week in a row, surging over 4% in the past 24 hours to surpass the $31,000 milestone. This is the first time since July that the world’s largest digital asset by market capitalization has reached this level. Over the past week, Bitcoin has seen a growth of more than 10%. As of 1:16 p.m. ET, it was trading at $31,203. The global cryptocurrency market capitalization also rose by 3.7% in the last 24 hours to reach $1.22 trillion.
Analysts Note Bullish Signals
Analysts have identified several bullish signals contributing to Bitcoin’s recent gains. Pavel Kuznetsov, Head of Portfolio at Ryze Labs, highlighted the narrowing GBTC discount as a positive sign. The NAV discount is now at -11%, reflecting the increasing consensus view that a spot bitcoin ETF will be approved in Q1 2024. This approval is expected to drive capital inflows and serve as a catalyst for further bullish momentum.
Michael Dunn, President of Bitnomial Exchange, emphasized how Bitcoin is decoupling from other cryptocurrencies and assuming characteristics of a market hedge. Its status as digital gold and anticipation of a spot ETF approval are key factors driving this decoupling. The rising bitcoin dominance metric further underscores its outperformance compared to other cryptos.
Caution Remains Regarding Correlation with Traditional Markets
While Bitcoin’s rally coincides with major stock indices hitting 10-month lows and the yield on Treasuries surpassing 5%, Pavel Kuznetsov remains cautious about proclaiming an end to Bitcoin’s correlation with the S&P 500 and Nasdaq. He acknowledges that over shorter time periods, Bitcoin is influenced by regulation, investor decisions, and macro factors. To truly determine if Bitcoin is de-correlating, a longer time period must be observed.
Hot Take: Bitcoin’s Rally Continues with Bullish Signals
Bitcoin’s recent rally shows no signs of slowing down as it breaks through the $31,000 mark. Analysts have identified various bullish signals, including the narrowing GBTC discount and Bitcoin’s decoupling from altcoins. These factors contribute to its outperformance and highlight its potential as a market hedge. However, caution remains regarding its correlation with traditional markets. As Bitcoin continues to make headlines and attract attention from investors worldwide, its future trajectory will be closely monitored.
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