Bitcoin (BTC) Price Surge: Reasons Behind the Uptrend and Impact on Altcoins

  • Bitcoin (BTC) price has made a dramatic comeback, defying recent struggles and surging by an impressive 6.47% in the last 24 hours. This positive trend emerges amidst a shift in investor sentiment regarding potential monetary policy adjustments by the US Federal Reserve.
  • The catalyst for this surge appears to be a combination of several factors. Recent data from the US Labor Department shows strong labor market conditions, with unemployment claims remaining steady at 208,000 for the week ending April 27.
  • This, combined with an increase in the Employment Cost Index, has instilled confidence in investors and led to increased belief that the Fed could adopt a more dovish stance by the end of 2024. Bitcoin rose by 6% following this development.

Bitcoin’s surprising price surge is driven by a combination of strong labor market conditions, potential monetary policy adjustments by the US Federal Reserve, and an increase in the Employment Cost Index.

Why did Bitcoin’s price rise?

This change in expectations is significant. Lower interest rates make fixed income investments less attractive and potentially shift capital towards riskier assets like cryptocurrencies. Data shows that market participants are increasingly betting on this scenario, with the likelihood of the Fed lowering interest rates to below 5.00% by December 18 rising significantly from 40% just a week ago to 61%.

Adjustment in M2 money supply

Fanning the flames is the US M2 money supply, which includes cash, savings, and short-term deposits, showing its first positive adjustment since November 2022. Historically, such increases have coincided with strong performances in the crypto market and potentially signaled a rally. A similar trend is apparent this time.

What’s the status of ETF entries?

Data obtained from Farside Investors highlights another bullish indicator: total net entries into US spot Bitcoin ETFs have astonishingly reached $11.2 billion since their launch in January. This strong investor interest underscores growing confidence in Bitcoin as a legitimate asset class. However, it’s worth noting that Grayscale GBTC experienced a net outflow on May 2, contradicting broader market enthusiasm and possibly attributable to specific investment strategies employed by leading firms.

Other cryptos also rose in price besides Bitcoin

The positive sentiment extended beyond Bitcoin, with other major cryptocurrencies recording notable gains. Ethereum (ETH) breached the $3,100 mark, while Solana (SOL), XRP, Cardano (ADA), and even meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) all registered significant increases.

Conclusion

Looking ahead, the recent resurgence in ETF entries appears to be a significant factor behind Bitcoin’s price increase. With ongoing positive economic data and the potential dovish turn by the Fed, the crypto market could be primed for a sustainable growth period. However, investors should remain cautious and conduct thorough research before making any investment decisions.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.
spot_imgspot_imgspot_imgspot_img

Latest News

Ethereum ETF Approval Poised to Skyrocket ETH Amidst Bitcoin Weakness

The impending approval of an Ethereum ETF...

Bitcoin ETFs Set to Reduce Volatility as Institutional Investments Surge: Analysts

Bitcoin Exchange-Traded Funds (ETFs) are expected to...

Bitcoin Mining Tied to Massive Electricity Theft in Malaysia: $723 Million Lost Between 2018-2023

Recent Malaysian reports reveal the significant impact...

MKR Price Surges as MakerDAO Announces $1 Billion Investment in U.S. Treasury Offerings

MakerDAO has announced an open competition to...
spot_imgspot_imgspot_imgspot_img

PRO Analysis

FLM Coin: In-Depth Analysis and Future Price Predictions of Flamingo Finance

Flamingo Finance, a DeFi platform built on...

Covalent (CQT) Coin: Comprehensive Blockchain Data Analysis and Future Price Predictions

Covalent emerges as a groundbreaking software integrating...

MOCA Coin: An In-Depth Look at Its Potential and Latest Price Analysis

MOCA Coin, LayerZero v2 protokolünde geliştirilen ve...

Ethereum Price Analysis: Potential Drop to $2,700 as Resistance Holds Strong

Ethereum's price trajectory has seen significant volatility,...
Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
spot_imgspot_imgspot_imgspot_img

Ethereum ETF Approval Poised to Skyrocket ETH Amidst Bitcoin Weakness

The impending approval of an Ethereum ETF stands to significantly influence the value of ETH. Ethereum has consistently outperformed Bitcoin over...

Bitcoin ETFs Set to Reduce Volatility as Institutional Investments Surge: Analysts

Bitcoin Exchange-Traded Funds (ETFs) are expected to transform the market by reducing asset volatility. Institutional interest and buy-ins have significantly increased...

Bitcoin Mining Tied to Massive Electricity Theft in Malaysia: $723 Million Lost Between 2018-2023

Recent Malaysian reports reveal the significant impact of illicit electricity usage in crypto mining operations. Authorities highlight ongoing issues with unauthorized...