Bitcoin Sails Positive $41K as Crypto Market Recovers to Pre-Terra Levels now

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Bitcoin (BTC) price moved past $41,000 during the Monday business day in Asia, for the first time since April 2022 – prices not seen before the crash of Terra – while Ether (ETH) moved past $2,200.

Bitcoin’s price had been toying with the $40,000 level in recent days, but finally breached it Monday to trade above $41,400 as of press time, according to CoinDesk Indicies data, a 24-hour rise of about 5%. Ether was trading hands at $2,240, a similar percent rise over the past 24 hours.

The other top ten cryptocurrencies by market capitalization marked smaller gains, though BNB coin (BNB), a token affiliated with the Binance exchange, was down about 0.1% over the past day.

The price of the world’s largest and oldest cryptocurrency fell below $40,000 in April 2022 but has been rallying over the past few months largely due to seemingly dovish comments from U.S. central bankers and hopes that a spot bitcoin exchange-traded fund (ETF) may be approved to launch in the country.

Ether had similarly not traded hands above $2,200 since May 2022, though it’s come close a few times.

Read more: Bitcoin surges past $40,000, marking now its highest value in 19 months amidst a broader uptrend in the cryptocurrency market positive

Bitcoin holders withdrew 37,000 BTC between Nov. 17 and Dec. 1, suggesting they were taking direct custody of their coins, CoinDesk reported earlier this week.

Bitcoin’s move above $40,000 comes as gold hit a record high of over $2,100 per ounce during the early Asian trading hours in response to dovish comments from Federal Reserve chairman Jerome Powell.

“The market is increasingly expecting a rate cut in the coming year, and investors are increasingly bullish on the outlook of Bitcoin ETF applications by some of the biggest names in asset management,” wrote Lucy Hu, Senior Analyst, Metalpha, in a note. “This is an official statement of a bull run, and the price could see more upticks in the coming weeks.”

Last week, Powell said that interest rates are now well into restrictive territory, bolstering the narrative that the tightening cycle has peaked and adding to downward pressure on Treasury yields.

“Crypto, on the other hand, has been moving nicely higher, along with Gold, on the back of lower yields,” crypto data provider Amberdata said in a newsletter Sunday.

“Bitcoin has been eager to jump higher, even without the Spot ETF catalysts headline hitting the wires, the market is looking to get long,” Amberdata added.

Traders have loaded up on topside option plays in recent weeks, betting on bitcoin’s eventual rise to $45,000 by the end of March 2024.

The week ahead will bring U.S. ISM services PMI data and non-farm payrolls for December. A strong NFP figure might result in the unwinding of Fed rate cut bets for 2024, slowing BTC’s ascent.

Institutional Traders Split Between Bitcoin, Ether: Bybit Research

Numbers from the exchange show institutional traders largely ignored alternative cryptocurrencies in favor of perceived “safe” assets.

Institutional traders are bullish on bitcoin, mixed on ether and skeptical of altcoins, a new report from Bybit Research shows.

During the first three quarters of 2023, institutional traders nearly doubled their holdings of bitcoin (BTC). As of Setpember, half their assets were denominated in the largest cryptocurrency, driven by positive market sentiment and anticipation of the Securities and Exchange Commission (SEC) approving a spot BTC exchange-traded fund (ETF) in the U.S. Their stance contrasts with the lower BTC holdings of retail traders, possibly due to their higher leverage levels, Bybit’s research shows.

Institutional traders and whales, or large holders of bitcoin, were skeptical about altcoins, the report says, with the data showing a general decline in altcoin holdings among traders despite a brief rise in May. A notable decrease started in August, particularly among institutions, reflecting a cautious stance towards these more volatile assets.

Ether (ETH) holdings have generally declined since the Ethereum blockchain’s Shapella upgrade, data shows, except for a surge among institutional traders in September amid a positive crypto outlook as ETF news excited markets.

The bitcoin price is up about 140% year-to-date, while ether has risen 87%.

In a report from October, K33 Research wrote that it was shifting stance on asset allocation, advising a pivot back to bitcoin due to ether’s prolonged slump against BTC since July 2022, and a muted response to the newly launched futures-based ETH ETFs.

“We believe it’s time to pull the brakes on ETH and rotate back into BTC amid ether’s ongoing underperformance,” they wrote.

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