The cryptocurrency market is experiencing a surge of excitement as Bitcoin, the largest digital currency by market capitalization, soared above $21,000 on Saturday. This marks the first time the currency has reached this level since November 8, 2022, and follows a string of 11 consecutive days of gains.
Investors have been eagerly watching the crypto market, particularly after the collapse of several high-profile companies in the industry, including cryptocurrency exchange FTX. However, the recent rally has not only encouraged crypto enthusiasts but also inflicted pain on bears who have liquidated hundreds of millions of dollars in short positions.
Data from Coinglass shows that these short liquidations totaled around $125 million for January 14 alone, with nearly $300 million of short liquidations in the period from January 11 onwards.
The rally has also seen the value of other digital currencies increase, with the second-largest token, Ether, surging as much as 9.7%, and Cardano and Dogecoin also notching gains. Solana even soared as much as 35%.
As a result of these gains, the total market capitalization of the cryptocurrency market has exceeded the $1 trillion mark for the first time since November, according to CoinGecko.
The current surge in Bitcoin’s value comes after the U.S. Labor Department released data showing that inflation is moderating with consumer prices up by 6.5% in December, down from 7.1% in November. Experts believe that this may have played a role in the crypto market’s positive performance, with Sean Farrell, head of digital asset strategy at Fundstrat, stating that “cryptoassets performed well following the soft CPI print, suggesting that crypto’s correlation to macro is not going away anytime soon.”
As the market continues to climb, many are considering whether this signals the end of the bear market for cryptocurrencies. Farrell believes that “there is a high probability that the absolute bottom is in for crypto prices,” provided that there are no forced liquidations from troubled crypto companies such as DCG. It remains to be seen whether this bullish trend will continue, but for now, the crypto market is definitely worth keeping an eye on.