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Bitcoin (BTC) has achieved a new all-time high (ATH) of $88,440, surpassing silver’s market capitalization of $1.729 trillion. The flagship crypto now holds a market cap of $1.74 trillion, reflecting its growing institutional adoption and market confidence. However, despite this milestone, Bitcoin still lags far behind gold, which holds a market cap of over $17.594 trillion, which is 10 times BTC’s current market cap.
Top Reasons Behind Bitcoin Price Surge
The latest BTC rally has been fueled by several factors, including rising institutional demand and increasing spot Bitcoin Exchange-Traded Fund (ETF) inflows. In addition, the U.S. Federal Reserve’s 25 bps rate cut, and pro-crypto Donald Trump’s presidential victory has added to the frenzy. Furthermore, the hype around the potential creation of a U.S. BTC reserve has also uplifted the market sentiment.
However, while analysts maintain a “structurally bullish” outlook, they also caution that BTC’s gains may face resistance. “We are cautious of any pullbacks especially from leveraged washouts,” QCP Capital analysts stated. The analysts pointed to elevated funding rates in perpetual swaps and a seven-month high in basis yields as indicators of market euphoria. These elevated basis yields typically do not last long, suggesting the rally could face challenges ahead.
INTEL: BITCOIN SURPASSES SILVER IN MARKET CAP
— Solid Intel 📡 (@solidintel_x) November 11, 2024
Key macroeconomic events are expected to play a critical role in determining Bitcoin’s price direction. The U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) will be released this week, followed by a crucial speech from Federal Reserve Chair Jerome Powell on Friday.
These events will provide insight into the Fed’s future rate policy, including the potential for a 25 basis point rate cut in December. Any significant change in the inflation outlook or rate policies could impact market sentiment and trigger a pullback in Bitcoin’s price.
Spot BTC ETFs have seen a massive inflow of $2.29 billion in just three trading days, with $1.37 billion coming in a single day following the rate cut. Such robust ETF inflows signal growing institutional interest, which is expected to further support Bitcoin’s upward trajectory. However, profit-taking on long calls has kept volatility in check, limiting any sharp fluctuations in price.
One of the most significant contributors to BTC’s rise has been MicroStrategy. On November 11, the company announced it had purchased 27,200 BTC for $2.03 billion, increasing its total holdings to 279,420 BTC, valued at $11.9 billion.