Bitcoin has surged above $63,000 after a prolonged slump to $54,000, and other cryptocurrencies like Ethereum and Solana are also showing signs of a potential bull run. This resurgence has led to speculation whether the market is set for another significant upswing.
The total crypto market cap has surged over 4% in the past 24 hours, reaching approximately $2.41 trillion. This increase follows weeks of a bearish trend, with Bitcoin finally gaining bullish momentum. BTC hit a daily high of around $63,000 before settling at $62,700. Ethereum (ETH) also experienced a rise of over 4%, hovering around $3,347.
Factors Fueling the Crypto Surge
Several bullish factors are driving this surge. Firstly, the German government has run out of Bitcoin to sell after offloading 50,000 BTC seized from the pirated movie website ‘Movie2k.’ Additionally, Donald Trump’s chances of winning the presidential election appear stronger than ever, especially following an alleged assassination attempt. Trump’s scheduled address to the crypto community at the Bitcoin 2024 Conference in Nashville further boosts confidence.
Recent U.S. Consumer Price Index (CPI) data and inflation figures indicate cooling inflation, which could lead to interest rate cuts by the Federal Reserve in 2024. The imminent launch of spot Ethereum ETFs is expected to create a supply crunch for ETH. Crypto investment products saw massive inflows of $1.44 billion last week, suggesting a positive shift in sentiment. Institutional investors remain bullish, with Standard Chartered maintaining a $150,000 price target for Bitcoin by the end of 2024.
The SEC appears to be losing its regulatory grip on the crypto sector, with multiple high-profile investigations dropped this year.
Growing Investment and Network Activity
Crypto venture funding continues to grow, with $3.6 billion deployed in Q2 2024 across 521 projects. Activity on the Solana network is also rising, despite recent market pullbacks.
Bearish Concerns
Despite the positive sentiment in the market, there are some concerns. The ongoing multi-billion dollar Mt. Gox repayments are likely to continue for two more months, adding more Bitcoin to the market. Additionally, Genesis has begun liquidating assets for a $3 billion repayment plan, which could also impact the market.
Some industry insiders, like Arthur Hayes, believe Trump’s support for the crypto industry is insincere and will wane once he is elected. Despite the hopeful outlook for interest rate cuts, the Federal Reserve remains hawkish, and cuts are not guaranteed this year.
Bitcoin and major altcoins are still well below their all-time highs and require significant momentum to surpass these levels. The altcoin sector continues to struggle with major token unlocks, with hundreds of millions worth of tokens set to unlock in July.
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With both factors pulling the price triggers, it will be interesting to see what direction BTC moves next. Is this the start of another crypto boom? Only time will tell.