The price of bitcoin shot up to its highest level so far this year as investors digested Federal Reserve Chairman Jerome Powell’s comments suggesting that interest rates will remain unchanged.
The largest cryptocurrency by market capitalization extended its rally on Friday, hitting $39,000 on the Coinbase (NASDAQ:COIN) crypto exchange.
With the recent surge, bitcoin has reached its highest value since May 2022, just before the cryptocurrency sector was rocked by the collapse of the Terra ecosystem and prices began a gradual slide.
As 2023 draws to a close, cryptocurrency speculators are focused on the possibility of bitcoin hitting $40,000, as the largest digital asset has more than doubled in value this year.
Bitcoin is up more than 133% so far this year, outpacing gains in many other traditional sectors as investors turned to riskier assets.
Hopes among traders and the cryptocurrency community at large that the U.S. Securities and Exchange Commission will soon approve the first exchange-traded fund directly linked to bitcoin are driving prices higher.
Bitcoin price path cleared for $40,000
According to on-chain analytics firm Santiment, bitcoin has almost breached $39,000 on the news that the U.S. Federal Reserve may leave interest rates unchanged until at least 2024.
With this move, Santiment believes that bitcoin has already paved the way for a $40,000 price.
Adding to this positivity is the fact that attention is increasingly being focused on altcoins instead, which Santiment says is “enough fear that is typically needed for prices to continue to rise”.
Santiment noted that as interest in altcoins wanes, bitcoin’s social dominance has increased in just one month.
At the time of writing, BTC was up 0.78% in the last 24 hours to $38,782, and hit an intraday high of $38,848 on Saturday.
