(Bloomberg) — Bitcoin surged over $21,000 on Saturday amid optimism that it could have bottomed and inflation could have peaked.
Most Read from Bloomberg
The biggest cryptocurrency rose as much as 7.5% to $21,299. It hadn’t been above $20,000 since Nov. 8, and Saturday marked its eleventh straight day advancing. Second-largest Ether surged as much as 9.7%, and other tokens like Cardano and Dogecoin also notched solid gains. The general market cap of the crypto universe rose above $1 trillion for the primary time since early November, in response to data from CoinGecko.
The gains got here amid a report on consumer prices last week that showed inflation declining in January from December levels. The Federal Reserve is on target to downshift to smaller interest-rate increases following that further cooling, though it’s more likely to keep mountaineering until price pressures show more definitive signs of slowing. That’s helped boost risk assets just like the Nasdaq 100 stock index, which has gained for six straight days.
“Cryptoassets performed well following the soft CPI print, suggesting that crypto’s correlation to macro shouldn’t be going away anytime soon,” said Sean Farrell, head of digital asset strategy at Fundstrat. “This week’s follow-through in price motion is definitely encouraging,” and barring any forced liquidations from troubled crypto company DCG “there may be a high probability that absolutely the bottom is in for crypto prices.”
The worth of Bitcoin was stuck in a narrow range around $16,000 to $17,000 for weeks before this latest breakout. The upward moves have caught shorts by surprise — crypto short liquidations have topped $100 million in five of the past six days, in response to data from Coinglass. Saturday’s total was the very best, topping $296 million.
“Declining CPI coupled with the announcement that the FTX liquidators have recovered $5 billion in liquid assets have given crypto markets plenty of things to forget the macro picture, which remains to be bearish,” Hayden Hughes, chief executive officer of social-trading platform Alpha Impact, said in a message Saturday. “Markets have loads of positive momentum heading into the subsequent FOMC meeting later this month.”
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.