Bitcoin (BTC) rallied to a new all-time high (ATH) of $77,200 on November 8, surpassing the previous record set a day earlier. The surge followed the U.S. Presidential election and the Federal Reserve’s decision to lower interest rates amid ongoing discussions regarding its monetary policy.
The cryptocurrency’s rapid ascent raised questions about the sustainability of this rally and the potential for a market correction.
Bitcoin’s Ascent to New Heights
Bitcoin’s recent rally has been nothing short of extraordinary. The digital asset has experienced a remarkable year-to-date growth of over 118%, with a nearly 25% increase in the last month alone.
The surge comes on the heels of positive seasonal trends and halving-year data, suggesting a bullish outlook for the leading cryptocurrency. Historically, Bitcoin has reached new ATHs during the last two election cycles and hasn’t retreated to pre-election price levels.
With a market capitalization of $1.5 trillion, Bitcoin now ranks as the ninth most valuable asset globally, surpassing Meta, formerly known as Facebook.
The latest ATH occurred approximately 48 hours after the U.S. presidential election, which saw several pro-cryptocurrency policymakers elected to Congress.
The price movement coincided with a sudden surge during Wall Street trading hours, mirroring the previous day’s activity.
Bitcoin’s volatile performance came as the Federal Reserve lowered interest rates by the anticipated 0.25%.
Following the Federal Open Market Committee (FOMC) meeting, Fed Chair Jerome Powell stated that the risk factors influencing the Fed’s inflation and employment mandate were “roughly in balance.”
“Recent indicators suggest that economic activity has continued to expand at a solid pace,” he added. “Since earlier in the year, labor market conditions have generally eased, and the unemployment rate has moved up but remains low.”
The Fed’s Balancing Act
Market consensus aligns with the Fed’s planned course of action, with expectations favoring a further 0.25% interest rate cut at the next FOMC meeting in mid-December, according to CME Group’s FedWatch Tool.
However, trading resource The Kobeissi Letter cautions that the Fed’s stance on interest rates could shift if longer-term inflation trends escalate.
“Ultimately, we expect to follow long-term inflation expectations which have not ticked higher yet,” they said on X. “However, if these do begin rising, as they now stand at 2.1%, we believe the ‘Fed pivot’ would be at risk. This is a big IF, but anything is possible as we head into 2025.”
Bitcoin’s Market Dynamics and Potential Risks
Despite the macroeconomic intricacies surrounding the Fed’s decisions, Bitcoin appears unfazed, reaching its highest-ever daily close.
According to CoinGlass, Bitcoin is up 8% month-to-date and boasts Q4 gains of 19.6%. Data from
CoinGlass data also reveals considerable liquidity building on both sides of the spot Bitcoin price on exchange order books.
Commenting on this trend on X, the platform warned of “high leverage liquidity,” suggesting that refraining from trading might be the most careful strategy in the current market environment.
Amid these liquidity shifts, trading account CryptoMutant anticipates a “little pump before this overheated market makes a correction.”
Another trader, CrypNuevo, foresees the possibility of a “long squeeze,” a cascade of long Bitcoin liquidations, before the weekly close.
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