Bitcoin Hits Another Milestone, Topping $77K for First Time; Funding Rates Suggest Crypto Rally Can Keep Going

During U.S. trading hours, the oldest and most significant cryptocurrency reached a fresh high of $77,105, as per the CoinDesk Bitcoin Index (XBX), although it only managed a slight increase of 0.2% over the preceding 24 hours. In contrast, the broader market index tracked by CoinDesk, the CoinDesk 20 Index, outperformed, with the native tokens of Cardano (ADA) and Polygon (POL) experiencing a significant rise of 15%.

1) The price of Ethereum’s ether (ETH) climbed approximately 3% and neared $3,000, marking its highest point in over three months, as the decentralized finance (DeFi) sector shows signs of growth. DeFi is expected to benefit significantly from potentially friendlier digital asset regulations in the U.S., which crypto market players anticipate from a new administration under Trump’s leadership. Solana (SOL), a competing layer-1 blockchain network often seen as Ethereum’s main rival in the DeFi space, reached $200 for the first time since April.

Looking at established stock markets, it’s worth noting that the S&P 500 reached 6,000 points for the first time, buoyed by optimistic equity markets after Donald Trump’s clear victory in the US Presidential election.

This week, crypto assets saw double-digit increases and Bitcoin reached new record highs. However, the funding rates for perpetual swaps on cryptocurrency exchanges are currently more akin to neutral levels than they were at the market peak in early March, according to CoinGlass data. To put it simply, the funding rate is the amount long traders pay short traders to assume the opposite position in a trade. When funding rates are negative, it means that short traders are paying fees to long traders, which is typically seen during periods of bearish sentiment.

According to Sean Farrell, who leads the digital asset strategy at Fundstrat, there’s no indication of a market bubble in funding rates.

The subdued bubbliness hints at the possibility of cryptocurrency prices still having significant potential for further growth, as one market player anticipates bitcoin reaching a peak of $125,000.

In a recent post on X, Ari Paul, the founder and Chief Investment Officer of BlockTower, stated that we’re approaching the latter stages of the bull market, which can be likened to being in the 7th inning of a game or at the beginning of the final third of a rally.

The speaker mentioned that recent purchasers seem to be preparing for a potential six- to 12-month surge, primarily led by institutional investors instead of individual buyers, implying a slower ascent towards their predicted goals. As the rally develops, retail interest and leverage are expected to rise. His advice is to acquire and maintain a few strategic crypto assets over the next few months, suggesting that a passive investment strategy could be more profitable during the early stages of the bull market, while more active trading may yield higher profits closer to its peak.

Paul stated, “We’re now at the seventh inning, which ranges from $90,000 to $125,000. After this, we have just two more innings remaining, and typically, the final ones show the steepest increase.