Analysis: How Bitcoin price surge to $40K dragged stocks and Altcoins with it

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Bitcoin‘s jump above $40,000 and the successful double-digit rallies of several altcoins confirm that the bulls are running the show.

Bitcoin’s price (BTC) reached a new all-time high of $40,000 on Jan. 7 following a price surge of more than $5,000 in less than 24 hours.

BTC/USDT 4-hour chart. Source: TradingView.com

The $40,000 threshold is a big landmark for the top-ranked cryptocurrency. According to Matt Blom, Head of Global Sales Exchange at EQUOS:

“Bitcoin’s march to $40k has been driven by fresh capital from huge hedge funds, corporate treasuries and awareness from the investing public that all is not well in the world of fiat. It’s easy to forget that we are still in the very early stages of adoption.”

Blom added that instead of “pick the top,” investors can only “enjoy the ride.”

Shortly after Bitcoin hit $40,400, there was a major selling pressure that saw its price dip down as low as $36,600 before traders rushed back to take advantage of the fast price dip.

Bitcoin’s 24-hour value has hit a record all-time peak of $82.4 billion, and a number of leading cryptocurrency exchanges have experienced outages and connectivity issues.

Stocks and altcoins move higher

Traditional markets have saw positive trade as the outcome of the US presidential election now seem to be finalised with Democrats running the presidency and both Houses of Congress.

The S&P 500, Dow Jones Industrial Average and NASDAQ 100 are all higher on a daily basis, up 1.42 percent, 0.71 percent and 2.37 percent respectively. The 10-year government bond also soared dramatically over the 1% threshold, selling at $1,076 at the time of publication.

Bitcoin’s rise over $40,000 raised its supremacy rate to 69.1 percent, but this did not adversely affect altcoin values. Notable movers of the day included XRP, which has hit 38.59 percent to $0.35 over the last 24 hours.

 

XRP/USDT 4-hour chart. Source: TradingView.com

Ether (ETH) price has started to climb higher, setting the current 2020 record at $1,282 as the biggest altcoin pursues its $1,400 all-time high.

Other noteworthy performers in the past 24 hours include the YFI of Nano and Yearn.finance, which have seen rises of 77.33 per cent and 20.93 per cent, respectively.

While several analysts keep calling for new regular all-time highs from Bitcoin, crypto trader Scott Melker warned caution, and in private comments to Cointelegraph Melker said:

“Beyond being a psychological level and a round number, I don’t view 40K as particularly significant. From a technical perspective, there is no resistance ahead – just blue skies because Bitcoin is in parabolic price discovery. The expectation would certainly be that a major correction will eventually come, but it is a fool’s errand to try to time it or to assume that an arbitrary number like 40K will be the top.”

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