On Wednesday, Bitcoin (BTC) successfully reclaimed the key price level of $100,000, having lingered below this threshold for several weeks. The key driver of this rebound stems from increased market confidence in the regulatory environment for the digital currency industry under President-elect Donald Trump's leadership.
With Brian Quintenz becoming a strong candidate for chairman of the Commodity Futures Trading Commission (CFTC), significant changes in the regulatory landscape are anticipated. Quintenz currently serves as the policy head at a16z Crypto (Andreesen Horowitz's digital asset division) and has previously served as a Republican CFTC commissioner, making him a favorable candidate in the crypto community.
Previously, the U.S. Securities and Exchange Commission (SEC) appointed cryptocurrency supporter Paul Atkins as chairman, shifting from the regulatory enforcement style led by the soon-to-retire Gary Gensler for many years. Trump's reversal of the Biden administration's crackdown on cryptocurrencies has begun to show results, with Bitcoin reaching a historic high of $104,000 on December 5 and fluctuating at six-figure price levels since, highlighting sustained investor enthusiasm.
Interest rate cut expectations boost morale
In addition to optimistic regulatory factors, the market's expectations of a potential interest rate cut by the Federal Reserve have also energized investor sentiment. After U.S. consumer price inflation met expectations, speculators increased their bets on a new round of rate cuts.
The shift in monetary policy expectations has positively impacted the market, driving the tech-heavy Nasdaq 100 index to a historical high. Henry Elder of UTXO Management noted, 'The market is pleased to see inflation within expectations.' Traders are currently focused on whether $100,000 will become the upper or lower limit for BTC prices.
The rise of industry support concepts
Donald Trump has not only shown a friendly attitude towards regulation but has also sparked widespread attention with his support for establishing a national strategic Bitcoin reserve. Although the feasibility of this idea remains disputed, Eric Trump stated on Bloomberg TV that his father would be 'an incredible ally for the industry.' Since Trump's victory on November 5, Bitcoin has surged nearly 50%, driven by approximately $11 billion in net inflows into U.S. spot Bitcoin exchange-traded funds (ETFs).
Whales increase holdings to strengthen bullish outlook
Technical expert Ali Martinez stated that whales are actively buying on dips, further consolidating the market's optimistic outlook for this flagship cryptocurrency. Notably, when Bitcoin's price fell from $104,000 to $90,000, 342 wallets held over 100 Bitcoins. The accumulation by major holders has fostered a positive market sentiment, with Martinez predicting that Bitcoin's price will climb to $275,000 based on a cup and handle pattern on the weekly chart.
