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Bitcoin Surges Above $58,000 Amid U.S. Tech Stock Rally and Rising Market Leverage
Bitcoin has surged past $58,000, driven by a rally in U.S. tech stocks and increasing market leverage. Explore the factors behind this bullish trend and what it means for investors in the cryptocurrency space.
Latest Prices
CoinDesk 20 Index: 1,831.41 (+2.21%)
Bitcoin (BTC): $58,088.29 (+2.45%)
Ether (ETH): $2,345.28 (+0.99%)
S&P 500: 5,554.13 (+1.07%)
Gold: $2,515.67 (+0.11%)
Nikkei 225: 36,833.27 (+3.41%)
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Bitcoin has surged above the $58,000 mark, propelled by a rally in U.S. technology stocks. Recent U.S. inflation data released on Wednesday appears to have reinforced expectations of a potential 25 basis-point interest-rate cut by the Federal Reserve this month. Following this data, major tech companies such as Nvidia, Microsoft, Google, and Apple experienced significant gains. Currently, BTC is priced just over $58,000, reflecting a 2.4% increase over the past 24 hours, while the overall cryptocurrency market has seen an approximate rise of 2.2%, as indicated by the CoinDesk 20 Index. However, it is noteworthy that the inflow of bitcoin exchange-traded funds (ETFs) has been interrupted after just two days, with Wednesday witnessing outflows of $43 million.
Leverage in the bitcoin market is on the rise again, indicating that traders are increasingly willing to take on more risk. The estimated leverage ratio, which is calculated by dividing the total global futures open interest by the number of coins held on exchanges, has surged to 0.2060, marking the highest level since October 2023, as reported by CryptoQuant. Prior to this surge, the market had demonstrated a months-long consolidation below the 0.2 mark, reflecting a more cautious sentiment among traders. This uptick in leverage suggests that the market could experience heightened volatility moving forward. High-leverage liquidity is currently concentrated around the $58,500 mark, according to insights from Hyblock Capital. As such, we may expect increased volatility as BTC approaches this threshold, particularly given that overall market liquidity remains low, which means that a single buy or sell order can significantly influence the prevailing market rate.
In an exciting development, the DeFi platform Pendle has launched new pools offering variable yields that can reach as high as 45% on a bitcoin-backed token, enhancing the platform’s product offerings. This new feature allows users to deposit LBTC, a liquid-staking token developed by the restaking startup Lombard, into a Pendle pool created in collaboration with the Ethereum layer-2 network Corn. Recent data indicates that this new pool has already attracted over $13 million in user deposits since its launch, which is set to mature on December 26. Lombard operates as a restaking service that transforms wrapped bitcoin (WBTC) into a Lombard Bitcoin (LBTC) token, facilitating its usage in various DeFi applications to generate yield. Meanwhile, Corn is another innovative startup that utilizes bitcoin as the primary token for processing usage fees.
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