Bitcoin, the world’s largest cryptocurrency, topped $ 54,000 to hit its highest level in nearly five months, as the uptrend returns to the market after the crisis of the previous months.
At the time of going to press, bitcoin was trading at $ 54,220, up 8.7% in the past 24 hours. It was the highest price since May 12, before a Chinese crackdown on its national cryptocurrency and other negative news helped push the price below $ 30,000. By February, the price of bitcoin had reached an all-time high of nearly $ 65,000.
The latest rally pushed bitcoin’s market cap back above $ 1 trillion, according to data from Messari.
“Bitcoin’s jump to a five-month high is no surprise to those who have followed this asset closely over the past several months,” said Jason Deane, analyst at Quantum Economics.
Markets often move on momentum and sentiment – especially after periods where it has been trading for some time in a price range, according to Deane. In June and July, bitcoin was trading primarily between $ 30,000 and $ 40,000, and then in August and September, the price settled in a range of $ 40,000 to $ 50,000.
Sentiment improved significantly in the first week of October, signaling a change from the stock market panic of the previous months. Bitcoin’s over $ 10,000 jump since October 1 matches a 25% gain already this month.
“If the bulls are looking for a sore spot, then the next stop is $ 60,000, and if they don’t find a pocket of shorts to strain, then confidence will only grow,” Matt Blom, global sales manager at digital asset company Eqonex, wrote in a newsletter Wednesday.
According to analysts at the Kraken cryptocurrency exchange, the fourth quarter has always been the best for bitcoin, with an average return of 119% since 2011. Last year, the price nearly tripled in the fourth quarter.
Denis Vinokourov, head of research at Synergia Capital, attributed the latest rally to US Securities and Exchange Commission (SEC) Chairman Gary Gensler’s statement to Congress on Tuesday that the SEC did not intention to ban cryptocurrencies.
“Gensler may have come across as being very anti-crypto, but he’s not here to kill crypto,” Vinokourov said.
“Tectonic plates have come together with the threat of a ban,” said Charles Morris, founder of ByteTree Asset Management.
Traditional markets are struggling in the current macroeconomic environment with falling stock prices, a potential energy crisis and fears of losses in China’s real estate sector, according to Morris.
“Global markets are lowering their risks,” in part because of fears of a possible financial crisis triggered by Chinese property developer Evergrande’s debt repayment problems, Kraken analysts wrote in a monthly report.
This could mean that “bitcoin is arguably becoming more resilient to traditional market turmoil,” according to the report.
Morris said the next step for bitcoin could come from a new surge in adoption from Wall Street and mainstream financial firms.