The recent surge in Bitcoin price to $44,700 marked a new yearly high. Over the course of the week, Bitcoin experienced a 9.58% increase in value. Interestingly, this rise occurred in tandem with a strengthening US dollar and rising stock indices. As a result, Bitcoin achieved an unprecedented feat of closing eight consecutive weeks in the green.
The surge in the dollar index to 104.05 points, driven by positive statistics and rising government bond yields, has resulted in delayed expectations for the Federal Reserve to ease monetary policy in March 2024. This positive sentiment is further fueled by the considerable growth in average monthly wages, the decline in unemployment rates, and an increase in the number of new jobs within the US economy. Consequently, the Fed is adopting a more hawkish stance towards the possibility of another interest rate hike.
Moving forward, the release of the general and core consumer price indexes (CPI) for November on December 12 will play a crucial role in shaping expectations and subsequent Fed decisions. Strong macroeconomic data has already contributed to the upward trend in US Treasury bond rates.
Moreover, institutional players like Fidelity and BlackRock are actively engaging with the US Securities and Exchange Commission (SEC) to obtain approval for Bitcoin exchange-traded funds (ETFs). These financial giants are showcasing their ETF products, presenting creation models, redemptions, and other essential features. Their efforts signify a growing interest from traditional financial institutions to remove regulatory barriers and enter the cryptocurrency market.
Considering these developments, the upcoming week might experience heightened volatility. Bitcoin’s price approaching the $45,000 mark presents a significant obstacle to overcome. However, given the previous week’s performance and ongoing market dynamics, there are indications that Bitcoin may experience a breakthrough and establish a stable position above $45,000.