Ahead of the Lunar New Year and Spring Festival celebrations across Southeast Asia, Bitcoin rallied to its highest level since August, extending gains over the weekend.
According to data compiled by CoinMarketCap, the leading cryptocurrency saw a dramatic increase on Saturday, rising to over $23,000 and gaining as much as 10% from the previous day. The coin has hit an all-time high of almost $23,282, a mark not witnessed in the past five months. Bitcoin has been trading at about $22,900, remaining relatively unchanged from yesterday.
Ethereum, the second-largest cryptocurrency, too, saw huge gains, reaching a local high of roughly $1,674—a level not seen since September of last year, when the highly awaited Merge upgrade was implemented. Total market capitalization now exceeds $1 trillion.
Due to its strong performance in the days leading up to the Lunar New Year holiday, Bitcoin has been enjoying a rally. The Lunar New Year is an excellent opportunity to get into the market, says Markus Thielen, head of research at Matrixport.
Year to date, Bitcoin and Ethereum have been up over 38% and 35%, respectively. The crypto market gained steam after the U.S. Department of Labor issued new statistics last week showing a slowing in inflation, suggesting that a number of reasons may have contributed to crypto’s good start this year.
Compared to November’s 7.1% annual rate, December’s figure of 6.5% was a decrease. To the extent that lower inflation puts pressure on the US Federal Reserve to cut down interest rate hikes, this is generally seen as favorable for risk assets like crypto.
While Ethereum might reach between $2,400 and $3,200 this year, Bitcoin could reach between $35-$44,000. This is according to Sean Farrell, head of the digital asset strategy at Fundstrat.