Bitcoin is maintaining its position above the $100,000 mark supported by growing risk-on sentiment driven by monetary easing from major central banks, according to Bitfinex Head of Derivatives, Jag Kooner.
The cryptocurrency, which surpassed $100,00 for the first time in history on December 5 2024, has peaked at an all-time high price of ~$107,000 since crossing the $100K milestone but has been fluctuating in the range between $95K and $103K since.
MILESTONE | #Bitcoin Surpasses the $100,000 Mark for the First Time in History
Since the start of 2024, Bitcoin is up by over 120% and by over 50% in the last one month since the election victory of U.S. President Donald Trump.https://t.co/Zc1PC4lDbM #Bitcoin100K pic.twitter.com/GnJYFtHqS4
— BitKE (@BitcoinKE) December 5, 2024
At the time of writing, Bitcoin is trading at ~$97,300.
“With the ECB rate cut, and the People’s Bank of China recently cutting rates for the first time in 14 years, a Fed rate cut could amplify global liquidity conditions,” Kooner said.
“This easing could spur capital flows into risk-on markets, including crypto.”
Kooner pointed to the European Central Bank’s decision on December 12 2024 to reduce its deposit rate for the fourth time this year [2024], cutting it by 25 basis points to 3%. This adjustment aims to address slowing inflation and weakening economic growth in the EuroZone.
Meanwhile, speculation is growing about further monetary easing by the People’s Bank of China. After implementing its first rate cut in over a decade in October 2024, some Wall Street banks, including Goldman Sachs and Morgan Stanley, anticipate additional rate reductions in 2025.
Projections indicate a potential 40-basis-point reduction in China’s main policy rate next year, which would be the largest annual cut since 2015.
Markets were closely monitoring the U.S. Federal Reserve ahead of the Federal Open Market Committee meeting on December 18 2024, amid increasing speculation about a possible rate cut. As it came to pass, expectations of a 25-basis-point rate cut by the Federal Reserve was confirmed, accompanied by China keep its one year and 5-year LPRs unchanged at 3.1 and 3.6% respectively, which fueled optimism in risk-on markets, including cryptocurrencies.
He further noted that speculation about a rate cut, combined with the typical year-end optimism seen in December 2025, “could spark a potential ‘Santa rally,’ pushing Bitcoin and other cryptocurrencies higher as investors increase their capital allocation to the sector.”
Kooner also suggested that a rally appears more likely following the recent reset in the derivatives market, where $1.7 billion in liquidations occurred on December 9 2024, wiping out open interest.
“Now that excessive leveraged long positioning has been removed from the markets, this sets the stage for the next leg up to begin over the next few weeks,” he said.
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