Bitcoin, the largest cryptocurrency by market capitalization, spiked above the $21,000 mark on Saturday.
The move has encouraged crypto investors who have been shaken by the collapse of several high-profile crypto companies, including cryptocurrency exchange FTX.
This is the first time since Nov. 8, 2022, that Bitcoin BTCUSD, -0.77% has crossed $20,000 and follows 11 days of gains.
The rally has inflicted pain on the bears who have liquidated hundreds of millions of dollars in short positions. According to Coinglass, these totaled around $125 million for Jan. 14 alone, with the period from Jan. 11 onward bringing nearly $300 million of short liquidations.
Second-largest token Ether ETHE, +0.36% surged as much as 9.7%, and others such as Cardano ADAUSD, -0.23% and Dogecoin DOGEUSD, -1.24% also notched gains. Solana s SOLUSD, +2.68% soared as much as 35%.
The gains pushed the total market capitalization of the cryptocurrency market over the $1 trillion mark for the first time since November, according to data from CoinGecko.
After dropping from just above $67,500 to a low near $15,000, a 77 % loss from the peak to the low, Bitcoin has spent about 13 months going mostly sideways, until buyers appeared again this week.
See also: What’s behind Bitcoin’s big rally, and why crypto traders bet the worst Is over
The current surge in bitcoin’s value comes after the U.S. Labor Department issued data showing that inflation is moderating with consumer prices up by 6.5% in December, down from 7.1% in November.
“Cryptoassets performed well following the soft CPI print, suggesting that crypto’s correlation to macro is not going away anytime soon,” Sean Farrell, head of digital asset strategy at Fundstrat told Bloomberg.
“This week’s follow-through in price action is certainly encouraging,” and barring any forced liquidations from troubled crypto company DCG, “there is a high probability that the absolute bottom is in for crypto prices.”
As 2023 gets underway, markets are clinging to expectations that the U.S. economy will slide into a recession that effectively forces the Federal Reserve to start cutting interest rates.
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