Cryptocurrency update: why are bitcoin and dogecoin going up?

Cryptocurrency update: Bitcoin and dogecoin are benefitting from a combination of market trends, investor sentiment, and external influences that are driving demand.

Key Points

1. Bitcoin's approach to the significant psychological milestone of $100,000 per token is generating heightened interest in the cryptocurrency sector.
2. Supply and demand dynamics influenced by spot ETFs are contributing to Ethereum's recent gains.
3. Dogecoin's strong rally, largely fueled by political factors, is also playing a key role in the overall market uptrend.

Positive Day for Cryptocurrencies

It's another encouraging day in the cryptocurrency market, with the total market capitalization reaching a new all-time high. As of 3:30 p.m. ET, the overall crypto market rose by 5.1% over the past 24 hours, surpassing $3.25 trillion.

Leading this surge are top tokens Bitcoin (BTC 1.89%), Ethereum (ETH 7.04%), and Dogecoin (DOGE 2.35%). These three cryptocurrencies account for nearly three-quarters of the total market value, making their performance critical to the overall market movement.

At 3:30 p.m. ET, Bitcoin, Ethereum, and Dogecoin increased by 3.7%, 8.8%, and 2.1%, respectively, with each token showing intraday gains exceeding 3%.

Bitcoin Approaching $100,000

Investors are closely monitoring Bitcoin as it nears the significant $100,000 mark, currently trading around $98,000. The market has seen a series of new all-time highs following President-elect Donald Trump's election victory.

A recent report suggesting that Trump may appoint a "crypto czar" has intensified bullish sentiment among traders and investors. This move could further legitimize the crypto sector. Additionally, reports of Trump considering a strategic Bitcoin reserve are fueling widespread bets that Bitcoin's price will continue to rise. This optimistic outlook is supported by fundamental factors and heightened speculative trading, driving momentum upward.

Ethereum's Spot ETFs

Ethereum's approval of spot exchange-traded funds (ETFs) positions it as a key beneficiary in the evolving crypto landscape. Similar supply and demand dynamics affecting Bitcoin are likely to influence Ethereum, especially if ETF inflows sustain buying pressure. Furthermore, ongoing deflationary measures from the Ethereum team could enhance its market position. While Ethereum is making significant gains post-election, it remains about 30% below its all-time high from the previous cycle.

Can This Rally Continue?

Many in the crypto sector, along with enthusiastic investors who may not closely follow the market, are eager to see Bitcoin reach the $100,000 mark soon. This psychological threshold seems ripe for breaking.

Bitcoin, Ethereum, and Dogecoin remain key assets in the cryptocurrency space and will serve as indicators for investors assessing market momentum and the overall direction of digital assets. Today's rally underscores the strong momentum currently present, and there is no reason why this upward trend shouldn't continue through the end of the year.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.