The recent rally in Bitcoin and altcoins, driven by economic and geopolitical factors, suggests a potential to reach new all-time highs.
Bitcoin (BTC) seeks to reach new all-time highs. Judging by the movements of the last 24 hours, it seems probable, since it is located just 2.4% of its ATH that it reached on March 14, 2024 when it touched US$73,737.94. The leading cryptocurrency approached US$73,600 this Wednesday.
Altcoins also show a notable rise. Ethereum (ETH) reaches almost $2,700, after increasing 2% in the last day. Other tokens, such as Dogecoin (DOGE), Tron (TRX), Cardano (ADA), and Chainlink (LINK), are up as much as 4%. However, some cryptocurrencies, such as Solana (SOL) and Shiba Inu (SHIB), have shown slight declines.
Bitcoin: what’s behind the rally
This rally has been driven by a combination of factors. First, the monetary easing cycle that central banks, especially the Federal Reserve (Fed), have adopted plays a crucial role. The Fed is expected to announce a 25 basis point cut at its next meeting and another in December. A larger-than-expected cut could push prices up further, while a more restrictive approach could have the opposite effect.
The business results of technology companies are also influencing the market. Yesterday, Alphabet, Google’s parent company, beat expectations in its quarterly results. Today, announcements are expected from Meta and Microsoft, which could also capitalize on the growth in artificial intelligence (AI). This correlation is significant, as Bitcoin, like other cryptocurrencies, has performed similarly to risk assets, especially Nasdaq tech stocks.
The recent rally in Bitcoin and altcoins, driven by economic and geopolitical factors, suggests potential for new all-time highs, especially with growing interest in exchange-traded funds and anticipation surrounding the Federal Reserve’s monetary policies.
In addition, the elections in the United States are impacting prices. Although polls indicate a great equality, betting markets favor a possible victory of former President Donald Trump, who is considered more favorable to cryptocurrencies. However, analysts at Standard Chartered argue that a Kamala Harris victory could also benefit Bitcoin, thanks to the perception that her policies would not be drastic.
The geopolitical situation in the Middle East is also affecting the market. Israel’s lack of attacks on key facilities in Iran has eased tensions, and talks on a ceasefire in Gaza could help reduce uncertainty. However, this period of calm could be temporary, as the electoral context in the US could generate new escalations of violence, potentially affecting the global economy and generating inflationary concerns that could impact Bitcoin.
Finally, the recent surge in spot Bitcoin exchange-traded funds (ETFs) has been notable, with net inflows exceeding $800 million this Tuesday alone. In the last two weeks, BlackRock’s IBIT has seen inflows of over $2 billion, with $600 million in the previous day alone. This Tuesday, the total trading volume reached $4.75 billion, the highest since March, of which $3.3 billion corresponded to the IBIT.
Source: Ambito
