The Bitcoin (CRYPTO: BTC) price is up just over 4% since this time yesterday.
At the time of writing, one BTC is worth US$20,130 (AU$31,589), having traded as low as US$19,261 earlier in the day.
The last time the world’s top crypto breached the psychologically important US$20,000 level was on 7 October, according to data from CoinMarketCap.
The Bitcoin price couldn’t hold above that level for long then. So does this signal another bear market bounce, or could it be the beginning of a new bull run for crypto investors?
What’s lifting the Bitcoin price?
Bitcoin and most all altcoins continue to trade in close correlation to growth equities, like tech shares.
And both the Bitcoin price and tech stocks have enjoyed a lift over recent days, courtesy of two separate factors playing out in the United States.
First, investors are hopeful that the Federal Reserve may not need to raise interest rates as aggressively as the market’s been pricing in. The higher interest rate environment unleashed in 2022 to combat soaring inflation has seen the Bitcoin price plunge 58% year to date. To highlight the correlation we mentioned, the Nasdaq Composite Index (NASDAQ: .IXIC) is down 29% so far in 2022.
A second factor helping support cryptos over the past week is some solid earnings results coming from some of the blue-chip companies reporting in the US. Those expectation beating earnings have helped buoy share markets and cryptos alike.
Which brings us to the question…
Is the crypto bull run back on?
Whether the Bitcoin price and the broader crypto market are back on track to run higher remains highly dependent on what happens to global interest rates.
As the world’s most influential central bank, presiding over the world’s top economy, the pace and extent of rate hikes from the Federal Reserve is one to watch closely. As the Fed approaches peak rates or, wait for it, even starts to ease, Bitcoin is likely to be amongst the assets to benefit.
Whether or not the past week’s optimism over the Fed’s potentially more dovish rate setting agenda is warranted remains to be seen.
