In the world of cryptocurrency, there’s rarely a dull moment, and the current market dynamics are living proof of that. As of Thursday morning in Asia, Bitcoin (BTC) has seen a notable surge, reaching around $114,200, marking a 2.4% increase over the past 24 hours. It’s not just Bitcoin that’s enjoying a rally; other major cryptocurrencies are joining the upward trend, painting a promising picture for investors as they navigate a week filled with macroeconomic events.
Dogecoin Takes the Lead
While Bitcoin’s rise is certainly noteworthy, Dogecoin (DOGE) is stealing the spotlight with its impressive performance. Over the past day, DOGE has jumped 5%, extending its weeklong gains to a substantial 15.9%. This surge underscores the memecoin’s unpredictable yet lucrative nature, enticing both seasoned traders and newcomers alike. Dogecoin’s recent rally exemplifies how quickly sentiment can shift in the crypto space, highlighting the potential for quick profits but also the inherent volatility.
Bitcoin’s Valuation Gap: Opportunity or Risk?
A compelling narrative is emerging around Bitcoin’s current valuation. According to a report from CF Benchmarks, Bitcoin is trading below its fair value when compared to the expansion of the U.S. M2 money supply. The gap between M2 growth and Bitcoin’s price is reportedly as wide as it has been since August 2024. Historically, similar divergences have preceded significant price increases in Bitcoin, as seen in 2016, 2019, and 2021.
The correlation between Bitcoin and M2 has been positive over the past decade, with monetary growth typically leading to price rises about three months later. If this pattern holds, Bitcoin could see additional tailwinds in the latter part of the fourth quarter, potentially pushing prices even higher. However, the market’s unpredictable nature means traders should approach this opportunity with cautious optimism.
The Levels to Watch
Despite the bullish sentiment, Bitcoin’s path forward isn’t without hurdles. Alex Kuptsikevich, chief market analyst at FxPro, noted that while Bitcoin continues to attract buyers during intraday dips, it’s currently in a fragile uptrend. The key level to watch is $112K, with the real test just above $115K, near the 50-day moving average. Surpassing this threshold would signal a return to optimism, but for now, Bitcoin is trailing behind stocks, which are hitting record highs.
Options and Inflation: A Cautious Approach
As traders brace for a week of significant macroeconomic data, options desks are reporting increased demand for protection ahead of the U.S. inflation figures due later today. This trend suggests a neutral-to-bearish short-term sentiment among traders, who are hedging against potential volatility. The upcoming Consumer Price Index (CPI) data could sway market dynamics, with a cooler trajectory strengthening the case for a Federal Reserve rate cut and a softer U.S. dollar—both typically supportive of Bitcoin and the broader crypto market.
Solana’s Steady Ascent
Solana (SOL) is another cryptocurrency making waves, with its price tracking a steady rise in Total Value Locked (TVL), which has reached a record $12.2 billion—a 57% increase since June. Analysts are floating $300 price targets for SOL, attributing this bullish outlook to persistent on-chain activity and liquidity. However, achieving these targets will likely depend on broader market risk appetite and the macroeconomic environment.
The Broader Market Picture
Ether (ETH), XRP, and Binance Coin (BNB) are also contributing to the crypto market’s positive momentum. ETH is up 2.4% at $4,400, while XRP has risen above $3, and BNB is nearing the $900 mark. This broad-based rally showcases the resilience and adaptability of the crypto market, even as traditional financial markets grapple with economic uncertainties.
Despite the current optimism, the crypto market remains sensitive to macroeconomic shifts. The upcoming U.S. CPI figures could be a turning point, potentially altering the market’s trajectory. A favorable inflation report could bolster the case for a continued uptrend, while a disappointing result might trigger a reassessment of risk and strategy among traders.
As the crypto landscape continues to evolve, investors are reminded of the importance of staying informed and agile. The interplay between macroeconomic factors and cryptocurrency performance underscores the need for a balanced perspective and a keen eye on both opportunities and risks. Whether it’s Bitcoin’s valuation gap, Dogecoin’s unexpected surge, or Solana’s steady climb, the crypto market is a dynamic and ever-changing arena that rewards those who are prepared to adapt and seize the moment.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
