Has the crypto bear market ended as Bitcoin jumps over $21,000?
On Saturday, Bitcoin, the biggest cryptocurrency by market value, surged beyond the $21,000 level.
The decision has boosted the confidence of cryptocurrency investors who had been rocked by the failure of numerous well-known crypto firms, including exchange FTX.
After 11 days of increases, Bitcoin BTCUSD, 4.86%, has crossed $20,000 for the first time since Nov. 8, 2022.
The rally hurt the bears, who sold off hundreds of millions of dollars’ worth of short contracts. According to Coinglass, this amounted to over $125 million on January 14 alone, with close to $300 million in short liquidations occurring between January 11 and that date.
Ether, the second-largest token, ETHE, +0.36% rose up to 9.7%, and other coins like Cardano ADA USD, 0.29% and Dogecoin DOGE USD, 4.05% saw gains as well. SOLUSD, 25.98% of Solana surged as much as 35%.
According to data from CoinGecko, the advances caused the overall market capitalization of the cryptocurrency market to surpass $1 trillion for the first time since November.
Bitcoin spent roughly 13 months mostly moving sideways after falling from just above 67,500 to a low near 15,000, a 77% loss from the peak to the low. Buyers started to show up again this week.
The U.S. Labor Department just released data showing that inflation is decreasing, with consumer prices rising by 6.5% in December, down from 7.1% in November, which coincides with the current spike in bitcoin’s value.
According to Sean Farrell, head of digital asset strategy at Fundstrat, “Cryptoassets fared nicely following the mild CPI print, demonstrating that crypto’s correlation to macro is not going away anytime soon.”
There is a strong likelihood that the absolute bottom for cryptocurrency pricing has been reached, barring any forced liquidations by the financially challenged crypto business DCG, according to this week’s market movement.