Bitcoin, the world’s largest cryptocurrency by market capitalization, soared to a new record high on Sunday, trading at $125,245.57 as of 05:12 GMT.
The milestone marks a 2.7% gain from the previous session and surpasses its earlier peak of $124,480 set in mid-August.
The rally has been fueled by a combination of favorable regulatory signals from the administration of U.S. President Donald Trump and robust demand from institutional investors.
Key Drivers Behind The Cryptocurrency Gains
Market analysts point to the recent momentum in U.S. equities and sustained inflows into bitcoin exchange-traded funds (ETFs) as key drivers behind the cryptocurrency’s eighth consecutive day of gains, noting that the ETF inflows are a strong signal that mainstream adoption is accelerating.
Bitcoin’s performance reflects growing confidence among institutional players and a more accommodating regulatory environment.
U.S. Dollar Weakens
Meanwhile, the U.S. dollar weakened on Friday, posting multi-week losses against major global currencies.
The retreat was attributed to mounting uncertainty over a potential government shutdown, which has delayed critical economic data releases, including payroll figures that are essential for assessing the health of the U.S. economy.
The contrasting trajectories of bitcoin and the dollar underscore shifting investor sentiment, with digital assets increasingly viewed as a hedge against traditional market volatility and fiscal instability.
On July 11, Bitcoin surged to a new all-time high of $118k. Three days later, it surged past $121K, with a 24-hour increase of 1.76%. This historic milestone came just before the highly anticipated Crypto Week, a period of growing interest and activity in the cryptocurrency market.
One month later, Bitcoin reached another record high of $124K, coinciding with a surge in American stocks as investors in global markets took on more risk.
What You Should Know
- However, on September 26, Bitcoin fell to a four-week low, dipping just below $110,000, as the cryptocurrency market shed $200 billion in market value.
- Investors pulled $253 million from U.S. spot Bitcoin ETFs, raising total weekly outflows to nearly $480 million. The heavy withdrawals coincided with Bitcoin slipping below key support levels, intensifying bearish sentiment.
- Market watchers note that Bitcoin’s sharp drop comes amid a broader sell-off across digital assets, fueled by concerns over macroeconomic conditions and heightened volatility. Traders are increasingly cautious as the market braces for a wave of expiries and liquidations.
The crypto bloodbath pushed the Crypto Fear and Greed Index to Extreme Fear territory. The Crypto Fear and Greed Index is now at 29, down 16 points from the previous day. This means that as the market approaches Extreme Fear territory, it has formally entered a state of fear.
