Bitcoin (BTC) recently captured the spotlight by climbing above $121,000, marking a significant milestone since its previous peak seven weeks ago.
The looming threat of a US government shutdown is prompting investors to seek refuge in more secure assets.
Often referred to as “digital gold,” Bitcoin has maintained its upward trajectory even as traditional gold experiences a pullback from its all-time highs. Karim Dandashy, an OTC trader at Flowdesk, noted that macroeconomic factors are once again influencing Bitcoin’s performance. He mentioned that this week alone saw $1.5 billion flow into ETFs, with Bitcoin striving to emulate gold’s impressive rally in recent times.
Other cryptocurrencies also experienced gains; Solana increased by 5.7%, Litecoin rose 6.7%, and Dogecoin climbed 4.7%. Stocks related to the crypto sector mirrored these trends: Coinbase surged by 7.8%, Strategy—known for holding substantial Bitcoin reserves—rose by 3.5%, and mining firm MARA Holdings saw an increase of 2.1%.
David Lawant, President of FalconX Research, suggested that the market had been anticipating such a breakout for quite some time: “There has been persistent selling pressure on spot order books for months without any price breakthrough until now.” This situation illustrates the classic squeeze dynamic where dwindling supply can lead to dramatic price surges—a scenario potentially unfolding right now.
An additional factor bolstering this rise is Bitcoin’s historically robust performance during October—a period dubbed “Uptober” within crypto circles. Ryan Watkins, co-founder of Syncracy Capital remarked: “While September usually marks a weak phase for Bitcoin; conversely Q4 tends towards strength.” Though skeptical about seasonal patterns himself he acknowledged their potential role as self-fulfilling prophecies within markets.
*This does not constitute investment advice.