Bitcoin prices neared a new all-time high on Friday, October 3, as intense demand and growing momentum put upward pressure on the digital currency.
The world’s largest cryptocurrency by market cap rose to nearly $124,000, according to TradingView’s Coinbase data.
Additional Coinbase statistics from TradingView revealed that at this point, the digital asset was trading at its highest price since August.
strong momentum
Several analysts have noted the convincing momentum Bitcoin has been enjoying recently.
“We’re in one of the most momentum-driven markets I’ve ever seen,” George Kailas, CEO of Prospero.ai, said in an email. “Momentum has accelerated recently with growing confidence that interest rate cuts will continue.”
“In addition to the typical bullish momentum for Bitcoin due to falling interest rates, there is a perception that Bitcoin acts as a hedge against government dysfunction,” he continued. “Whether that belief is really valid remains unclear, but in a momentum-driven market, the perception itself appears to be driving this rally in Bitcoin.”
Brett Shiffring, wealth manager at Gerber Kawasaki Wealth & Investment Management, also weighed in on the current state of Bitcoin, stressing in an emailed comment that there are “several reasons to think Bitcoin is gaining momentum.”
“Recently, weaker-than-expected U.S. employment data (ADP data) has increased the likelihood of a Fed rate cut in October,” he said. “Low interest rates mean risk-on assets like Bitcoin are generally viewed favorably by market participants.”
“We continue to see solid demand for spot ETFs, and I think that creates great support to build on top of Bitcoin,” Shiffring added.
“It also marks the start of October, a month known in the crypto community as ‘Uptober’ as it has been a seasonally favorable month throughout Bitcoin’s history,” he added.
“Given all these positive events in addition to the government shutdown, it makes sense that Bitcoin would receive a bid and hit new highs,” Shiffring concluded.
Multiple factors drive profits
One analyst in particular argued that a variety of bullish variables are driving Bitcoin’s recent rally.
“Bitcoin’s sudden rise to $124,000 reflects a variety of factors,” Joe DiPasquale, CEO of crypto hedge fund management firm Bitbull Capital, said in an email.
“Strong inflows into spot ETFs and institutional demand are providing steady buying pressure, while expectations for Fed easing are increasing appetite for risk assets,” he added.
“At the same time, post-halving US political uncertainty and supply constraints are reinforcing the ‘digital gold’ narrative,” DiPasquale continued.
“As Bitcoin nears all-time highs, the bull market is self-reinforcing as momentum traders continue to gather.”
Strong demand in the US
Julio Moreno, head of research at CryptoQuant, focused on the Coinbase Premium Index, defined as “the (percentage) difference between the Coinbase Pro price (USD pair) and the Binance price (USDT pair)” and its impact on US investor demand.
The graph below helps explain these developments.
“This price increase is primarily supported by relatively high investor demand in the US, as seen in the increase in the Bitcoin price premium on Coinbase, the highest level since June 7th,” he said via Telegram.
“US investor demand is what typically drives Bitcoin prices higher during bull markets,” Moreno added.
“Notable” circumstances
Tim Enneking, managing partner at Psalion, gave his two cents on the current state of Bitcoin, highlighting how it stands out.
“As the number of companies, countries, and other entities expanding their purchases of BTC continues to grow, not to mention the fact that the US may join the list of buyers, what is remarkable about the fact that BTC is almost reaching its new ATH is not that we are getting close to it, but that we are not there yet despite all the upward pressure!” he said in an email.
“After all, for most of this year, the number of BTC purchased by public institutions significantly exceeded the number generated by miners,” he noted.
“Given this supply and demand relationship, prices can only really go in one direction.”