Bitcoin (BTC) achieved a fresh all-time high (ATH) of $77,200 on November 8, surpassing its previous record set only a day prior. This surge coincides with post-U.S. Presidential election optimism and the Federal Reserve’s decision to lower interest rates, sparking discussions about whether the rally will hold or if a market correction is likely.
Bitcoin’s Unprecedented Ascent
The digital currency has delivered remarkable growth, with a year-to-date increase of over 118% and nearly 25% in the past month alone. Historically, Bitcoin often sees a bullish trend during election years, as seen in the past two election cycles where prices reached new highs and did not revert to pre-election levels.
Bitcoin’s market capitalization has now surpassed Meta’s, reaching $1.5 trillion and positioning it as the ninth most valuable global asset. The recent price spike occurred roughly 48 hours post-election, marking a period when several pro-crypto policymakers entered Congress, further fueling investor confidence.
Additionally, the Federal Reserve’s 0.25% rate cut decision during its Federal Open Market Committee (FOMC) meeting has influenced investor sentiment. In remarks, Fed Chair Jerome Powell suggested economic indicators still support solid growth, with a slight uptick in unemployment. Market sentiment anticipates another 0.25% cut in mid-December, though rising long-term inflation expectations may impact this outlook.
Macro Trends and Potential Market Risks
Amid Bitcoin’s unprecedented performance, The Kobeissi Letter cautions about long-term inflation risks, noting that if inflation expectations rise above the current 2.1%, the Fed’s “pivot” strategy could face reconsideration.
Bitcoin’s surge has brought about significant liquidity on both sides of the spot BTC price across exchanges. On X (formerly Twitter), CoinGlass analysts warned of the “high leverage liquidity” evident in current exchange order books, advising caution due to the volatile environment.
Crypto analysts are split on the market’s immediate future. While CryptoMutant forecasts a “small pump” before a possible correction, CrypNuevo warns of a potential “long squeeze,” where extensive long positions could trigger a cascade of sell-offs before the weekly close.
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