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(Kitco News) – It was a positive end to a breakout week for the cryptocurrency market as prices were up across the board, with traders chasing double-digit gains in the altcoin market while Bitcoin (BTC) climbed back above $44,000.
Stocks also inched higher following a bout of volatility in the morning that saw prices pump and dump. Investors are growing increasingly confident that the Federal Reserve is done with interest rate hikes and will be able to orchestrate a soft landing, which is helping to support asset prices.
At the closing bell, the S&P, Dow, and Nasdaq were all in the green, up 0.41%, 0.36%, and 0.45%, respectively. The U.S. 10-year Treasury yield gained 2.81% and sits at 4.245%, and the DXY climbed 0.34% to sit at 103.987.
Data provided by TradingView shows that Bitcoin bulls steadily pushed its price higher in trading on Friday, climbing from $43,140 in the morning to $44,465 at the time of writing, a gain of 2.65% on the 24-hour chart.
BTC/USD Chart by TradingView
“December Bitcoin futures prices are a bit firmer in early U.S. trading Friday, after hitting a contract and 20-month high Wednesday,” said Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The pause in prices late this week is not bearish,” Wyckoff said. “A price uptrend on the daily bar chart remains firmly in place. Bulls still have the solid overall near-term technical advantage. More price upside is likely in the near term.”
For those wondering what is powering the rally in Bitcoin and the broader crypto market, Markus Thielen, head of research at Matrixport, said “Bitcoin does not move randomly,” but is instead driven by “A mixture of crowd psychology and macro factors.”
“Liquidity and market structure considerations help with understanding shorter-term moves,” he added.
“Several factors have contributed to Bitcoin’s +165% meteoric rise this year,” Thielen said. “Understanding the drivers of price returns is essential in making decisions about risk and reward.”
“On January 1, 2023, Bitcoin started the year trading at $16,547 with a gloomy outlook,” he said. “Some commentators argued for a U.S. recession, while others expected that MicroStrategy would be forced to liquidate its leveraged Bitcoin position. The fourth crypto bear market started in November 2021 when the U.S. Federal Reserve began to alter its outlook to a more hawkish stance.”
“In contrast, the fifth crypto bull market began when expectations rose that U.S. inflation had peaked. Interestingly, Bitcoin has nearly reached our $45,000 year-end target, which we set out on February 1, 2023,” Thielen said.
As for what comes next for BTC, market analyst Jonny Moe said that will likely depend on how soon a spot Bitcoin ETF gets approved.
“I expect an immediate violent upward impulse when the news breaks, and then a possibly slightly delayed but more severe sell-off,” Moe said. “This news has been expected for months, its release does not change anything fundamentally. Market recognition of this sets in, markets sell.”
“This is why ‘buy the rumor sell the news’ works again and again and again,” he said. After that, Moe pointed to the Bitcoin halving, which is “currently slated for April-May, depending on how block times pan out between now and then.”
“Some still try to deny whether the halving impact on price is ‘real’ – but if you know how to read a chart it’s impossible to deny its past success,” Moe said. “For three straight halvings over a decade period, Bitcoin price goes on a tear in the months after the halving. That sets us up for a summer 2024 rally into the second half of next year.”
Bitcoin liquid index 1-week chart. Source: X
As for the intervening period between the approval of an ETF and the halving, Moe warned, “Don’t get yourself chopped to pieces overtrading consolidation.”
“I’m looking for consolidation in the 30,000s for a period of months before we begin the ascent again,” he said. “Just long enough for the media and the general public to forget about it again.”
MN Trading Founder Michaël van de Poppe also sees the possibility of an extended period of sideways trading for Bitcoin and said that could present a good opportunity for a significant run-up in the altcoin market.
#Bitcoin has seen a tremendous run from $25,000 to $45,000.
Perhaps there’s some more upwards momentum to $50,000, but there’s a high chance #Altcoins will take over momentum coming few months. #Ethereum to $3,000-3,500.
— Michaël van de Poppe (@CryptoMichNL) December 8, 2023
Altcoin season ramps up
Altcoin traders were active on Friday as Bitcoin consolidated, leading to a positive day for all but 20 tokens in the top 200.
Daily cryptocurrency market performance. Source: Coin360
Jito (JTO) led the gainers with an increase of 66%, while BitTorrent (BTT) gained 33.5%, and Bonk (BONK) climbed 25%. Echelon Prime (PRIME) was the biggest loser, falling 6.9% to trade at $7.41, followed by a loss of 6.6% for ssv.network (SSV), and a decline of 3.95% for Helium (HNT) and Beam (BEAM).
The overall cryptocurrency market cap now stands at $1.64 trillion, and Bitcoin’s dominance rate is 52.8%.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
