On Wednesday, Bitcoin (BTC) successfully reclaimed the key price level of $100,000 after hovering below that mark 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.
With Brian Quintenz as a strong candidate for chairman of the Commodity Futures Trading Commission (CFTC), a significant shift in regulatory landscape is expected. Quintenz currently serves as policy head at a16z Crypto (Andreesen Horowitz's digital assets department) and has previously been a Republican CFTC commissioner, seen as a favorable choice by the crypto community.
Previously, the U.S. Securities and Exchange Commission (SEC) appointed cryptocurrency supporter Paul Atkins as chairman, changing the regulatory style that had been led by the soon-to-retire Gary Gensler, which focused on enforcement. Trump’s reversal of the Biden administration's crackdown on cryptocurrencies has shown initial results, with Bitcoin hitting a historic high of $104,000 on December 5 and fluctuating at six-figure price levels, demonstrating sustained investor enthusiasm.
Interest rate cut expectations boost morale
In addition to optimistic factors from the regulatory side, market expectations of possible interest rate cuts by the Fed have also injected vitality into 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 created a positive chain reaction in the market, propelling the tech-heavy Nasdaq 100 index to a historic 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.
Industry support concepts on the rise
Trump has not only shown a friendly attitude towards regulation but also sparked widespread attention with his support for establishing a national strategic Bitcoin reserve. Although the feasibility of this idea remains controversial, 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 net inflow into U.S. spot Bitcoin exchange-traded funds (ETFs).
Whales increase holdings and strengthen bullish outlook
Technical expert Ali Martinez stated that whales are actively buying on dips, further solidifying the market's optimistic outlook for this flagship cryptocurrency. Notably, when Bitcoin's price dropped from $104,000 to $90,000, there were 342 wallets holding more than 100 Bitcoins. The accumulation behavior of major holders has fueled a positive market sentiment, with Martinez predicting that Bitcoin's price will rise to $275,000 based on a cup-and-handle pattern on the weekly chart.
