What’s driving crypto prices this week? Are we finally in a bull market?
In the past seven days, major cryptocurrency prices have been soaring across the board. From Bitcoin to Ethereum, Doge, and Shiba Inu, almost every major crypto has shown tremendous recovery this week. The global crypto market cap is up by nearly 8% in a week, reaching $1 trillion for the first time in 45 days.
More specifically, Bitcoin is up by nearly 6%, whereas Ethereum has received 17% gains. Most noticeably, Dogecoin prices have increased over 110% in the last past seven days, hitting the $0.1 mark for the first time in almost 6 months.
So, what’s causing this rise? And are we finally entering a long-awaited bull market?
Bloomberg’s historic crypto magazine
Last week, Bloomberg released a 40,000-word magazine dedicated to cryptocurrencies, titled ‘The Crypto Story’. This was only the second time in Bloomberg publication’s 93-year-long history that it has released an entire edition on a single story. The report provided some critical insights and analysis into the crypto industry that focused on both the positives and negatives.
The article emphasized that crypto has a long way to go in terms of building credibility, but it’s the only way of rejecting the centralized control-oriented monetary institutes. Bloomberg author Matt Levine dubbed crypto as ‘trustless and censorship-resistant. This kind of positive reflection shows that there is an increasing awareness of crypto and its true potential across the industry. Such statements also demonstrate that communities are rightfully losing faith in centralized and obscure financial systems.
Although the report talks in-depth about the risks and negative aspects of crypto, there is a certain bullish sentiment in the analysis that poises crypto to be one of the biggest financial tools heading into the future. This report has evidently uplifted market sentiment, which is one of the drivers behind the current bullish trend.
Elon Musk’s $44 billion takeover of Twitter
After months of speculations and discussions, billionaire and Tesla founder Elon Musk have finally bought Twitter. But how does it affect crypto?
The Tesla CEO has been an advocate for cryptocurrency for a long-time. Having a pro-crypto businessman at the helm of Twitter significantly impacted the market sentiment. More specifically, it affected the Dogecoin market. Elon Musk is an active advocate for the meme coin. In fact, the Tesla website accepts DOGE as payment for some of its products.
Musk’s takeover of Twitter is one of the main reasons why DOGE has gone up by over 110% in the past week. More and more people are investing in the leading meme coin, as liquidation is decreasing.
The stock market is taking a plunge
In the past 6 months, the primary stock market has been crashing as inflation is leading to increased interest rates around the world. S&P500 is down by 6.8% in the past 6 months, as NASDAQ has fallen by over 60%.
Although Bitcoin prices also fell during this time period, its volatility was comparatively lower than the major stocks. In the last five months, Bitcoin has maintained a steady resistance level at $19K and didn’t dip below that level. While this is still a substantial gap from its price a year ago, the volatility has been considerably lower than major stocks.
Therefore, many investors are trusting crypto over the stock market. There’s also been a significant influx of DeFi projects providing high-yield staking and borrowing services for various tier-1 tokens. The prospect of passive income in a bear market is also drawing more people into the market.
Ethereum has become deflationary
For the first time since the merge, Ethereum’s supply became deflationary on October 8th. It means that more ETH is being burned every day through staking rewards than new supply. As the merge saw Ethereum shift to PoS, mining became obsolete and the daily production of new tokens dropped from 13,000 to 1,600.
It took nearly a month for the existing tokens in circulation to be burned through staking rewards. On October 8th, more ETH was burned than produced for the first time since the merge. The supply is continuously falling every day, which is also driving ETH prices in the market. The leading altcoin is currently up by 17% in the seven days.
These are some of the key reasons why the cryptocurrency market has been doing well in the past week. So, are we in a bull market? We are definitely going through a bullish trend. However, whether we can officially say it’s a bull market depends on how long this trend is sustained. If prices continue to show resistance and an upward trend heading into November, then we might be in for a bullish Christmas.