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Bitcoin climbs to highest in nearly two weeks

Bitcoin climbs to highest in nearly two weeks
Bitcoin climbs to highest in nearly two weeks   -   Copyright  Thomson Reuters 2021
By Reuters

By Gertrude Chavez-Dreyfuss and Tom Wilson

NEWYORK/LONDON -Bitcoin rose on Friday to its highest level since around mid-September, bolstered in part by seasonal factors as well as supportive comments overall from Federal Reserve Chairman Jerome Powell on Thursday.

Powell, in testimony to Congress, said the Fed has no intention of banning cryptocurrencies. The reply came in response to a question from House Representative Ted Budd.

Some analysts also said October is typically a bullish month for digital assets, with September historically a bearish period for the sector.

“The digital asset market is benefiting both from the seasonality effect as well as generally positive market fundamentals,” said Ulrik K.Lykke, founder of crypto assets hedge fund ARK36.

“Q4 has often seen strong performances and the expectation the trend will continue this year can become a self-fulfilling prophecy. It is possible that we will see new all-time highs in Q4, especially that on-chain data, particularly in the case of bitcoin, seem to indicate a potential for a strong bull market continuation.

He also cited Powell’s comments on Thursday as one factor for bitcoin’s positive price action.

The largest cryptocurrency was last up nearly 9% at $47,742, hitting a high of just under $48,000. If gains are maintained, bitcoin would be on pace to post its largest daily percentage gain since mid-June.

Smaller coins ether and XRP, which tend to move in tandem with bitcoin, were up nearly 10% at $3,294% and 8.2% at $1.0299, respectively.

Joseph Edwards, head of research at Enigma Securities in London, also cited spiking volumes on crypto derivatives exchanges as a possible driver for the moves. Derivatives trading often influences spot prices in bitcoin markets.