Bitcoin surged to a record high on Monday, rising over the $81,000 level on bets that the cryptocurrency market will flourish in a favorable regulatory environment following the election of Donald Trump as U.S. president and pro-crypto candidates to Congress.
The world’s biggest cryptocurrency has now more than doubled from the year’s low of $38,505. As of 6:41 GMT, Bitcoin gained 1.02 percent to $81,216.08 after reaching a record high of $81,899 earlier.
“In the past 24 hours, total market liquidation has exceeded $600 million, with around $300 million each for long and short positions. Market sentiment has been robust, with a strong increase in bullish momentum,” stated Ryan Lee, chief analyst at Bitget Research.
Investor sentiment climbs
Trump embraced crypto during his campaign, promising to make the U.S. the “crypto capital of the planet” and accumulate a national stockpile of Bitcoin.
“The asset is now in price discovery, and the momentum from this could continue to push the price higher, meaning Bitcoin could potentially reach six figures within a few months,” said Josh Gilbert, market analyst at eToro.
Analysts warned, however, that Trump’s near-term priorities will likely divert to other matters but crypto investors see an end to scrutiny under U.S. Securities and Exchange Commission chair Gary Gensler whom Trump has said he will fire.
The cryptocurrency industry spent more than $119 million backing pro-crypto congressional candidates. In Ohio, one of the crypto industry’s biggest opponents in Congress, Senate Banking Committee Chair Sherrod Brown was removed. In addition, pro-crypto candidates from both the Democratic and Republican parties won in Michigan, West Virgina, Indiana, Alabama, and North Carolina.
“This week, we expect the volatility of BTC and ETH to continue to increase, with potential upward breakthroughs followed by rapid corrections. The predicted range for BTC this week is between $76,000 and $85,000, while ETH is expected to fluctuate between $2,800 and $3,500. Users should exercise caution when using leverage and consider taking profits promptly based on market conditions,” Lee added.
Institutional appetite for Bitcoin grows
Trump also launched a new crypto business, World Liberty Financial, in September. Although details about the business are few, investors have taken his personal interest in the sector as a friendly signal. In addition, billionaire Elon Musk, a major Trump ally, is also a proponent of cryptocurrencies.
Institutional appetite for Bitcoin is also growing at a time when interest rates are set to fall sharply and risk assets are gaining more traction. Monthly inflows to Bitcoin ETFs are picking up significantly, with over $5 billion in net flow in October.
“This record high could also be the driver that brings retail interest back to the ‘euphoria’ levels we’ve seen in previous cycles, that the asset class hasn’t quite experienced this year,” said Gilbert.
Crypto market surges
Gains in cryptocurrencies have been broad. In addition to the Bitcoin surge, Ether rose above $3,200 for the first time in over three months on Monday and was last at $3,139.16. Dogecoin hit a three-year high and was last at $0.28.
“Trump’s possible expansionary fiscal policies could strengthen the dollar, benefiting U.S. imports but adding pressure to emerging market currencies that rely on dollar stability. His protectionist measures may drive short-term appreciation of the dollar but could create volatility if trade restrictions strain global financial flows,” said Amro Zakaria, a financial services industry strategist.
Read: UAE, global gold prices dip as market awaits key U.S. data, Fed comments
Market outlook
“Key indicators to keep an eye on include funding rates for contracts. As BTC has risen, there has been significant short liquidation in the derivatives market. The funding rates for long positions in BTC, ETH, and SOL have begun to deviate from their normal value, annualized at 10 percent. If these rates continue to rise along with prices, it would indicate increasing market leverage, raising the probability of significant market fluctuations,” added Lee.
Lee added that another factor to watch is the relative gains of BTC and altcoins. “While BTC broke through the $80,000 level in the past 24 hours, there has not been a clear rebound in BTC exchange rates for ETH, SOL, and other tokens,” he stated. This indicates that BTC is absorbing liquidity from the market, signaling a tightening of market funds which may lead to extreme volatility in derivatives markets due to liquidity constraints.
The relative prices of call and put options suggest strong market sentiment, Lee explained. In the options market, BTC call options have become significantly more expensive than put options, showing a strong bullish bias and a degree of market consensus for further upward movements.
For more news on markets, click here.
