Bitcoin soared to $38,800 for the first time since May 2022 in the European morning hours on Friday, riding a wave of optimism from expected institutional demand.
The digital currency has seen a nearly 3% increase in 24 hours, in line with global stock market rallies. US index futures and European indices saw modest gains, with market sentiment buoyed by the potential for a new spot exchange-traded fund (ETF) in the US.
Key factors contributing to Bitcoin’s rise:
- Anticipation of a spot exchange-traded fund in the US.
- Significant Bitcoin transfers to cold storage, suggesting strong demand and low sell pressure.
- The total cryptocurrency market cap surpassing $1.5 trillion, with a $400 billion increase since October.
Driving the cryptocurrency market further, narratives around artificial intelligence, primary blockchains, and gaming are pushing large-cap tokens upward. Solana’s SOL and Avalanche’s AVAX have more than doubled in price over the past two months.
However, some analysts suggest Bitcoin’s growth could moderate as December advances, citing historical patterns of mixed performance for the month.
As of December 1, Bitcoin has reclaimed the $38,000 level, recovering from any potential sell-off pressures at the monthly close.
With key support levels holding firm, the market looks towards potential resistance at $47,000 and the 2021 peak of $69,000 for future price movements. The market remains watchful, with the Federal Reserve Chair’s speech and other macroeconomic factors potentially influencing upcoming volatility.