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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.