Bitcoin has risen above $120,000 for the first time in a month and a half. What is behind the new spurt?

Bitcoin rose to $120,000 for the first time in seven weeks: this signals a lack of concern among crypto investors about the U.S. shutdown, Barron's says. The growth is supported by expectations of a Fed rate cut, the seasonal effect and investors' hopes for cryptocurrencies as protective assets. Other digital assets and companies related to the crypto market were also in the plus.

Bitcoin rose by about 1.4% in trading on October 3, CoinGecko service shows. The value of the largest digital asset by capitalization rose above $120,000 for the first time since the record set seven weeks ago. It is now being driven upward by expectations that the shutdown will push investors to "safe havens," Bloomberg writes.

Other cryptocurrencies also showed gains over the day, with Ethereum, the second largest capitalization, adding more than 2%, XRP, the third largest market value, at 1.9%, and Solana at 2.6%.

Securities related to the crypto market are also in the plus: shares of crypto exchange Coinbase jumped by 7.8% on October 2, the securities of bitcoin reserve management company Strategy - by 4.1%, miner MARA Holdings - by 2.1%.

Bitcoin's market structure has long been "waiting for a breakthrough," said David Loant, head of research at crypto broker FalconX, he was quoted as saying by Bloomberg.

"There has been a continued bias toward selling in spot orders for months without a collapse in price - this is more indicative of supply absorption than apathy," he said. - It's a classic compressed spring dynamic: when pressure from above eases, growth can be sharp and cascading. That seems to be what we're seeing now."

An additional factor of optimism is seasonality: October is traditionally one of the most successful months for bitcoin, which earned it the nickname Uptober (formed from the words Up (growth, up) + October (October)). Over the past ten years, the token has grown in October on nine occasions.

"September is historically the weakest month of the year, and the fourth quarter is the strongest," noted Ryan Watkins, co-founder of crypto fund Syncracy Capital. - I'm not a proponent of blind faith in seasonality, but it often becomes a self-fulfilling prediction."

Wall Street is also not paying attention to the shutdown so far: on October 2, three major U.S. stock indices closed at historic highs, notes The Barron's. On October 3, futures on the Nasdaq 100 rose by 0.3%, contracts on the S&P 500 and Dow Jones rose by about 0.2%.

Additional stimulus came from private sector employment data from ADP, one of the largest US companies in the field of payroll outsourcing and HR services: the figure was below expectations, which strengthened forecasts for a Fed rate cut at the October 28-29 meeting.

This article was AI-translated and verified by a human editor