Bitcoin prices approached a fresh, ever-high on Friday, October 3rd, as strong demand and momentum boosts put upward pressure on digital currencies.
According to TradingView’s Coinbase data, the world’s largest cryptocurrency by total market value has risen to nearly $124,000.
At this point, the digital assets were trading at the most inflated value since August, and TradingView’s additional Coinbase figures reveal.
Strong momentum
Several analysts focused on the fascinating momentum Bitcoin has enjoyed recently.
“We’re in one of the most momentum-driven markets we’ve ever seen,” George Kailas, CEO of Prospero.ai, said in an email. “The momentum has been driven recently by increasing confidence that interest rate cuts will continue.”
“The realization that adding to the typical bull momentum from the lower fees in Bitcoin will serve as a hedge against government dysfunction,” he continued. “It remains unclear whether that belief is truly effective, but in a momentum-driven market, recognition itself appears to be driving this surge in Bitcoin.”
Brett Sifling, wealth manager at Gerber Kawasaki Wealth & Investment Management, also put a strong emphasis on the current situation in Bitcoin, highlighting the comments received in emails saying, “There are several reasons why I think it’s gaining momentum.”
“In recent years, softer than expected US employment data (ADP numbers) have been linked to increasing the likelihood of a Fed rate reduction in October,” he said. “Low rates mean that risk-on assets like Bitcoin are generally seen favorably by market participants.”
“We continue to see strong demand for spot ETFs, which I think is creating great support for Bitcoin to build on top,” added Sifling.
“We’re entering October as well, and this is a seasonally favourable month for Bitcoin throughout history, so it’s called “Uptober” in the crypto community,” he added.
“With the government shutdown, all these positives, it makes sense for Bitcoin to catch bids and create new highs,” concluded Shiffling.
Multiple factors drive benefits
In particular, one analyst argued that a variety of bullish variables are driving Bitcoin’s latest profits.
“The surge in Bitcoin against $124,000 reflects a mix of factors,” said Joe Dipasquale, CEO of Bitbull Capital, Cryptocurrency Hedge Fund Manager, in an email.
“While strong inflows and institutional demand for spot ETFs provide stable purchasing pressure, expectations for Fed easing have boosted desire for risky assets,” he added.
“At the same time, halfway through the US political uncertainty and supply constraints strengthened the ‘digital gold’ narrative,” continued Dipasquale.
“Rally has become self-enhancing as momentum traders accumulate as Bitcoin approaches its previous record high.”
Strong US demand
Julio Moreno, Head of Research at Cryptoquant, focuses on the Coinbase Premium Index, defined as “the difference between (percent) between Coinbase Pro Price (USD pair) and Binance Price (USDT pair).”
The chart below will help explain these developments.
“This price hike movement is primarily supported by relatively high US investors’ demand, as seen in the rise in Coinbase’s Bitcoin price premium, which is at its highest level since June 7th,” he said via Telegram.
“The demand for US investors is usually what drives Bitcoin price increases in bull markets,” added Moreno.
“Amazing” situation
Psalion’s managing partner Tim Enneking offered 2 cents in Bitcoin’s current situation, highlighting how well it stands out.
“What’s notable about BTC hitting the new ATH as the ever-growing number of companies, countries and other companies are increasing their purchases of BTC, not to mention the possibility that the US will join the list of buyers, isn’t that close to doing so, but even so, upside down pressure doesn’t do that!” he said in an email.
“After all, for most of the year, the number of BTC purchased by public agencies is well above the number produced by miners,” he said.
“Given this supply and demand dynamics, there’s actually only one direction in price.”
