Crypto market capitalization rose above $1 trillion for the first time since November

For the first time since the beginning of November, the total market capitalization of the cryptocurrency industry has exceeded $1 trillion, according to data from CoinGeck.

On January 14, Bitcoin rose to over $21,000 on hopes that inflation had peaked and bottomed out. The largest cryptocurrency rose up to 7.5% to $21,299. It hasn’t been above $20,000 since November 8, and January 14 was its 11th consecutive day of gains. Ether, the second largest cryptocurrency, rose 9.7%, and other coins like Cardano and Dogecoin also saw significant gains.

Prior to this latest breakout, the price of Bitcoin had been trapped in a small range between $16,000 and $17,000 for weeks. The upward movements surprised the shorts; according to Coinglass statistics, short cryptocurrency liquidations have exceeded $100 million in five of the last six days. The highest amount was reached on January 14 and exceeded 296 million dollars.

The increases coincided with consumer price data released last week that indicated a drop in inflation from December levels to January levels. Following that additional cooling, the Federal Reserve is on track to move to smaller rate hikes, but is expected to continue to do so until price pressures show more confident signs of easing. Risky assets, such as the Nasdaq 100, which rose for six straight days, benefited from that.

After the mild CPI print, cryptoassets fared well, indicating that the correlation between crypto and macros isn’t going away anytime soon, according to Sean Farrell, head of digital asset strategy at Fundstrat. The price action that has continued this week is undeniably positive, and barring any forced liquidations by financially challenged crypto business DCG, there is a strong likelihood that an absolute bottom has been reached for cryptocurrency prices.

The macroeconomic environment, which is still bleak, was overshadowed by the fall in CPI and the news that FTX liquidators returned $5 billion in cash, according to Hayden Hughes, CEO of social trading platform Alpha Impact. Going into the upcoming FOMC meeting later this month, markets are moving strongly in the right direction, he added.

(With contributions from Bloomberg)

This story was published from the agency’s feed without changes to the text. Only the title has been changed.

Meet your inner investor
Do you have nerves of steel or are you suffering from insomnia due to investing? Let’s define your investment approach.

Solve the test

Follow all business news, market news, highlights and latest news updates on Live Mint. Download The Mint News app to receive daily market updates.

More or less

Leave a Comment

Your email address will not be published. Required fields are marked *