Bitcoin Price Breaks $100K: Rate Cut Anticipations Ignite Crypto Market Rally

Key Takeaways:

1. Bitcoin’s Milestone Recovery: Bitcoin price surged past $101,000, driven by investor optimism following the release of CPI data meeting expectations of 2.7%.
2. Federal Reserve Speculation: A 98% probability of a 25 basis point rate cut by the Federal Reserve has further fueled the bullish sentiment in the market.
3. Market-Wide Gains: Ethereum price rose 7.5%, XRP surged 20%, and altcoins like Solana, Cardano, and Avalanche saw double-digit growth within 24 hours.
4. Institutional Accumulation: Strong institutional demand, bolstered by ETFs, has played a pivotal role in limiting Bitcoin’s corrections during the current crypto market bull run.
5. Sector-Wide Optimism: All 22 crypto sectors tracked by Artemis registered gains, with bridge tokens and exchange tokens leading the charge.

Bitcoin price has reclaimed the six-figure milestone, surging past $101,000 following the release of November’s Consumer Price Index (CPI) report. The CPI, which met expectations with a 2.7% year-over-year rise, has significantly bolstered investor optimism. This confidence is driven by a 98% likelihood of the Federal Reserve implementing a 25 basis point rate cut next week, potentially lowering the benchmark interest rate to 4.33%.

Read: Bitcoin price prediction

As of now, Bitcoin price is trading at $100,700, demonstrating resilience after bears failed to push it below the psychological $100,000 mark. This recovery follows a 10% dip from its December 5 all-time high of $103,918.67, during which the crypto briefly plunged to $90,200 in two flash crashes before bouncing back.

According to CryptoQuant CEO Ki Young Ju, the ongoing bull cycle is underpinned by strong institutional demand, driven largely by exchange-traded funds (ETFs) and corporate accumulation. This robust interest may limit the extent of future corrections.

Crypto Market Joins the Rally

Bitcoin price resurgence has set the tone for a broader crypto market rally. Ethereum price surged 7.5%, surpassing $3,800, while XRP price saw a dramatic 20% rise to $2.42. Other major altcoins, including Solana (SOL), Cardano (ADA), Tron (TRX), and Avalanche (AVAX), recorded gains of 11%, 16%, 10.6%, and 13%, respectively.

Sui (SUI) also made headlines, climbing 20% to $4.25, reclaiming its spot among the top 20 cryptos by market capitalization. Data from Artemis highlights an average market gain of 7.8% over the past 24 hours, with tokens tied to centralized exchanges leading the surge, posting an average daily increase of 17%.

Read: Ethereum price prediction

Notably, bridge-related tokens like LayerZero (ZRO) and Wormhole (W) experienced a 10% average rise, while all 22 sectors tracked by Artemis showed positive performance, underscoring the market’s broad-based strength.

Institutional Support and Rate Cut Expectations

Institutional players have been instrumental in driving Bitcoin’s current rally. The possibility of a Federal Reserve rate cut has added to the bullish sentiment, as lower interest rates tend to favor risk assets like cryptos.

With Bitcoin firmly above $100,000 and altcoins riding the wave of optimism, the market appears to be poised for further growth. Investors will now turn their attention to the Fed’s decision next week, which could serve as a catalyst for the next leg of the crypto rally.

This bullish momentum reflects growing confidence in the crypto market’s long-term potential, underpinned by institutional support and evolving macroeconomic factors.

Source: CryptoSlate