Following the release of US Consumer Price Index (CPI) data for November, Bitcoin has once again crossed the $100,000 mark and is now trading around $100,500. CPI rose 0.3% month-on-month, in line with market expectations. The data increased optimism about the possibility of the Federal Reserve cutting interest rates next week. Bitcoin had previously dipped below $95,000, but has since rebounded to near its all-time high of $103,679. Short-term liquidations within four hours on Wednesday exceeded $6.96 million, reflecting strong market momentum and contributing to the rally.
The rise in the price of Bitcoin affected the broader crypto market, with altcoins experiencing significant gains. In particular, XRP rose 17% to trade at $2.44 following the announcement of the launch of Ripple Labs' RLUSD stablecoin. Ripple's approval to issue a stablecoin in New York marks an important regulatory milestone. Solana rose more than 9% to $229, while Cardano rose 13% to $1.09. Dogecoin and Shiba Inu also performed well, rising 9% and 13% respectively. Ethereum registered a modest gain of 2.37% to trade at $3,716.
Institutional investment continues to be the driving force behind the cryptocurrency market's recent momentum. CoinShares reported record inflows of $3.85 billion into digital asset funds last week, of which BlackRock's iShares ETF accounted for $3.2 billion. The total amount of crypto assets managed by BlackRock now stands at $56.7 billion, underscoring the growing interest of institutional investors in digital assets. Expectations of a 25 basis point (bp) interest rate cut by the US Federal Reserve (Fed) have further heightened market sentiment. Lower interest rates are generally favorable for risk assets and encourage investors to diversify their portfolios into cryptocurrencies.
The price increase in XRP was particularly notable, with $2.59 million in short positions being liquidated during the rally. Ripple’s regulatory developments and stablecoin efforts have strengthened investor confidence in Ripple assets. Broad market sentiment reflects optimism towards cryptocurrencies as an alternative investment class, supported by technological advances, regulatory milestones and strategic partnerships.
Bitcoin’s price recovery highlights its resilience and role as a leading indicator for the broader crypto market. The recent rally highlights continued interest from both retail and institutional investors who view Bitcoin and other cryptocurrencies as valuable assets in the current economic environment. Due to the combined influence of macroeconomic factors, ecosystem development, and increasing adoption, the crypto market continues its upward trajectory, reaffirming its growing prominence in global financial markets. .
