Cryptocurrency market capitalization surpasses $1 trillion for the first time since November

For the first time since early November, the total market capitalization of the cryptocurrency sector has exceeded $1 trillion, according to data from CoinGecko.

On Jan. 14, Bitcoin surged to over $21,000 in hopes that inflation may have peaked and bottomed. The largest cryptocurrency surged as much as 7.5% to $21,299 in value. It hadn’t crossed $20,000 as of November 8, and January 14 was its 11th consecutive day of growth. Ether, the second largest cryptocurrency, climbed as much as 9.7% and other coins like Cardano and Dogecoin also posted significant gains.

Before this most recent breakout, the price of Bitcoin had been trapped in a small range of $16,000 to $17,000 for weeks. The up moves surprised the shorts; According to Coinglass stats, cryptocurrency short liquidations exceeded $100 million in five of the past six days. The largest amount was reached on January 14 and exceeded $296 million.

The increases coincided with consumer price data released last week which pointed to inflation easing from December levels to January levels. Following this further cooling, the Federal Reserve is on track to move towards smaller interest rate hikes, but is expected to continue to do so until price pressures show more certain indications of moderation. Risky assets, such as the Nasdaq 100 stock index, which has risen for six consecutive days, have benefited.

After the weak CPI print, cryptoassets have fared well, indicating that the correlation between crypto and macro isn’t going away any time soon, according to Sean Farrell, head of strategy for digital assets at Fundstrat. The price action that has continued this week is undoubtedly positive, and barring any forced liquidations by the DCG crypto business, there is a strong likelihood that an all-time low has been reached for crypto prices.

The macroeconomic backdrop, which is still bleak, was overshadowed by the drop in CPI and news that FTX liquidators had recovered $5 billion in cash assets, according to Hayden Hughes, chief executive officer of social trading platform Alpha Impact. Going into the next FOMC meeting later this month, markets are moving strongly in the right direction, he added.

(With Bloomberg input)

This story was published from a news agency feed with no text edits. Only the title has been changed.

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