The cryptocurrency market is riding high on hopes of a friendlier regulatory environment under a potential Donald Trump administration, with leading cryptocurrencies like Bitcoin, Ethereum, and Dogecoin experiencing significant gains. Bitcoin, in particular, shattered its previous all-time high set in March, surging past $75,000 for the first time. This impressive rally contributed to Bitcoin’s fourth-quarter gains reaching 18.74%, exceeding historical averages of 83% returns.
Ethereum also saw substantial gains, reaching levels last seen in late August, while Dogecoin surged over 8%. Despite this bullish sentiment, Ethereum experienced some heavy sell-offs, while Dogecoin managed to outperform the market with over 8% gains in the last 24 hours. The market saw a significant wipeout of nearly $400 million in short positions over the past 24 hours, indicating a potential shift in sentiment.
Bitcoin’s Open Interest also climbed 9.30%, highlighting a surge in speculative interest. The Binance Top Trader Long/Short Ratio currently sits at 1.48, suggesting a majority of top traders on the exchange are leaning towards bullish positions. This optimistic market sentiment has pushed the Cryptocurrency Fear and Greed Index to “Extreme Greed,” raising concerns about a potential market correction.
Beyond the top cryptocurrencies, other coins experienced significant gains, with First Neiro On Ethereum (NEIRO) leading the pack with a 59.56% increase. Ethena (ENA) and Bittens (TAO) also performed well, with gains of 36.18% and 32.70%, respectively. The overall global cryptocurrency market capitalization reached $2.47 trillion, representing a 5.55% increase over the past 24 hours.
This surge in cryptocurrency values coincides with a broader market rally. The Dow Jones Industrial Average surged 1,508.05 points, or 3.57%, to a record high of 43,729.93. The S&P 500 rose 2.53%, ending at 5,929.04, and the Nasdaq Composite gained 2.95%, closing at 18,983.47. Both the S&P 500 and Nasdaq Composite also hit record highs. These benchmarks were bolstered by a significant 14.8% rally in Tesla Inc. (TSLA) shares, driven by CEO Elon Musk’s potential involvement in the new Trump administration. Trump Media & Technology Group Corp. (DJT) also saw a notable increase of nearly 6% during the session.
Despite the optimism surrounding the market, analysts are voicing caution. CryptoQuant, a popular on-chain analytics firm, noted that Bitcoin might not be overvalued, even with its recent surge. The firm, in an X post, highlighted that the MVRV ratio shows Bitcoin is still far from peak levels, indicating a potential for further growth. However, Arthur Azizov, CEO of cryptocurrency payment provider B2BINPAY, expressed a different viewpoint. In a statement to Benzinga, he suggested that Bitcoin might experience a sharp correction towards the end of this week or early next week. He attributed this potential downturn to a lack of liquidity above the current price and the Federal Reserve’s rate announcement scheduled for Thursday, which is expected to introduce further volatility. Despite his concerns, Azizov anticipates Bitcoin reaching between $80,000 and $90,000 by the end of the year.
The cryptocurrency market’s recent surge, fueled by the potential political shift, has brought renewed attention to the sector. While the future remains uncertain, analysts and investors will be closely watching the market for clues about its sustainability and potential for future growth.
