Cryptocurrencies relax at the beginning of the week. Bitcoin It operates with a slight increase of 0.8% in the last 24 hours to $97,100. Meanwhile, Ethereum It advances 4.8% to $3,400 in the last 24 hours.
The rest of the altcoins operate with increases of up to 10.5% led by Avalanche (AVAX), 10.3% by Chainlink (LINK) and 6% by Near Protocol.
The outlook for Bitcoin: will it reach $100,000?
BTC stayed on FridayThe verge of surpassing the US$100,000 barriera milestone that analysts hope will occur sooner rather than later. The leading cryptocurrency did not stop rising after Donald Trump’s electoral victory in the United States, as it is expected that the president-elect favors the regulation of digital assets during his term.
Likewise, Cryptocurrencies have greatly benefited from the resignation of the president of the Securities and Exchange Commission (SEC), Gary Gensler, thus facilitating the appointment of a new head for the regulator more sympathetic to the new president and his policies. Gensler has been known, among other things, for his strong anti-crypto stance, suing numerous companies and establishing a law enforcement approach to regulation during his tenure. Among the names that are being talked about to succeed Gensler are Mark Uyeda and Hester Peirce, two renowned cryptocurrency advocates.
Likewise, analysts point out that The appointments of Howard Lutnick and Scott Bessent as Secretary of Commerce and Secretary of the Treasury, respectively, are also support for crypto assets. Both investors are the heads of Cantor Fitzgerald and Key Square Group and are also known for their pro-crypto-asset stance.
Bitcoin’s correlation with the Nasdaq at five-year lows
The Results from technology companies such as Nvidia have also favored crypto assets, given their status as risk assets. However, since Trump’s election, bitcoin has reduced its correlation with the tech-heavy Nasdaq to five-year lows. This has been due to the The cryptocurrency’s rally was greater than that of the index after Trump’s victory.
“The data implies that bitcoin will be correlated with risk assets at certain times, especially in times of increasing or decreasing risk appetite (‘risk-on’ and ‘risk-off’, respectively). However, the data show that, over a long period of time, and especially in the second half of 2024, we are starting to see a divergence in the correlation between bitcoin and the Nasdaq. As bitcoin becomes a larger asset class, now the seventh largest active by market capitalization, expected to start trading on its own as the market has a better understanding of the asset“explains cryptocurrency analyst James van Straten.
Could a scenario of volatility come in the price of Bitcoin?
For its part, the financial services platform specialized in cryptos FalconX points out that, as the cryptocurrency approaches US$100,000, could be much more sensitive to negative events. Specifically, these experts point out that the “order book tilt index shows that buyers have surprisingly reduced their purchasing power as prices approach six figures.”
This index measures the number of people willing to sell in relation to those who are on the demand or purchase side. “As we approach 100,000, the slope approaches levels that have only been seen three times since 2022. Although this does not threaten the rally in the medium term, it suggests that The fight to break through the $100,000 level could be intense“, these strategists point out.
Likewise, FalconX highlights that Any possible correction or an eventual rise above US$100,000 “could be violent”as overall market depth or liquidity has decreased amid the price rally, despite an increase in trading volumes. The recent decline in liquidity means that a few large orders can have a disproportionate impact on the current market, which could generate rapid swings in prices.
FOMO warning
Experts warn that investors would do well not to get carried away by excessive optimism. This is what Javier Molina, senior market analyst at eToro, thinks, who recommends that the market increase caution at this time and employ a “detailed” analysis to avoid incurring large losses. “Despite the enthusiasm, it is crucial to approach this moment with caution. LVertical movements like the current ones are tempting, but also dangerous. “It is essential to avoid impulsive decisions guided by FOMO (fear of missing out, in this case, a bitcoin rally),” said this strategist.
Source: Ambito
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