Bitcoin Breaks Above $21,000 Amid Inflation Optimism, FTX

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(Bloomberg) – Bitcoin jumped over $21,000 on Saturday amid optimism that it may have bottomed and inflation may have peaked.

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The largest cryptocurrency rose 7.5% to $21,299. It hadn’t been above $20,000 since Nov. 8, and Saturday marked its 11th consecutive day of gains. The second-largest Ether jumped 9.7%, and other tokens like Cardano and Dogecoin also saw strong gains. The overall market capitalization of the crypto universe topped $1 trillion for the first time since early November, according to data from CoinGecko.

The gains came amid a consumer price report last week that showed January inflation falling from December levels. The Federal Reserve is on track to downgrade to lower interest rate hikes in the wake of this further cooling, although it will likely continue to rise until price pressures show more signs. definitive slowdown. That helped boost risky assets like the Nasdaq 100 stock index, which has gained for six straight days.

Crypto-assets performed well after the soft CPI print, suggesting crypto’s correlation to the macro won’t go away anytime soon, said Sean Farrell, head of digital asset strategy at Fundstrat. . This week, the price action tracking is certainly encouraging, and barring any forced liquidations from struggling crypto firm DCG, there is a high likelihood that the absolute bottom will be reached for crypto prices.

Bitcoin price was stuck in a tight range around $16,000-$17,000 for weeks before this latest breakout. The upside moves caught off guard as crypto short liquidations topped $100 million in five of the past six days, according to data from Coinglass. Saturday’s total was the highest, topping $296 million.

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The drop in CPI coupled with the news that FTX liquidators recovered $5 billion in liquid assets gave crypto markets plenty to overlook the macro picture, which is still bearish, Hayden said. Hughes, managing director of social trading platform Alpha Impact. in a message on Saturday. Markets have a lot of positive momentum heading into the next FOMC meeting later this month.

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