Key Points
- Bitcoin reaches a new all-time high of $71,605 amid speculations of the Bank of Japan (BOJ) raising interest rates.
- Ethereum and Binance BNB also experience growth, with Ethereum nearing the $4,000 resistance point and Binance BNB rising past $520.
In the early hours of Monday, March 11, Bitcoin and the broader cryptocurrency market experienced a surge. This rise was influenced by global macro developments, including the growing speculation that the BOJ might increase the benchmark interest rate above zero in its meeting on March 18-19.
Bloomberg reports suggest that the likelihood of the BOJ making this move is gaining momentum. This potential rate hike would be the first by the BOJ since 2007.
Bitcoin and Altcoins Surge
Consequently, Bitcoin has reached a new all-time high, trading at $71,605 with a market cap of $1.406 trillion. Altcoins are also experiencing growth, with Ethereum inching closer to the crucial resistance of $4,000. Binance BNB coin has also seen an increase, shooting past $520 and extending its weekly gains to over 26%.
As the BOJ considers shifting away from its negative interest rate policy, it may also stop its bond-buying program. Analysts have continuously warned that the BOJ presents a significant uncertainty factor for both traditional and cryptocurrency markets.
Since 2016, the BOJ’s Negative Interest Rate Policy (NIRP) and bond-buying initiatives have put downward pressure on global government bond yields and supported asset prices. Despite other counterparts like the US Federal Reserve implementing rapid rate hikes to fight inflation, the BOJ has upheld a pro-liquidity stance in the past two years.
However, the BOJ is now under increasing pressure to raise rates, driven by domestic inflation exceeding its target.
US CPI Data in Focus
The primary focus of this week’s economic data reports will be Tuesday’s release of the US consumer price index figures. Projections suggest that the core prices gauge is likely to increase by 0.3% in February compared to the previous month and by 3.7% on a year-over-year basis. If true, this will also be the smallest annual rise since April 2021.
Despite a decrease in the expected number of Federal Reserve rate cuts for the year, ongoing moderation in US prices would strengthen the existing disinflation narrative.
In the commodities market, gold is nearing a record high due to the Federal Reserve’s outlook. Meanwhile, oil prices are witnessing a drop ahead of forthcoming reports from OPEC and the IEA, which are expected to provide insights into the demand outlook.
According to Santiment, Bitcoin and Ethereum have significantly surpassed the returns of the S&P 500 (+0.5%) last week. Santiment reports that historically, cryptocurrency markets have shown sustained bull markets with minimal correlation to equities. As a result, traders are optimistic that this trend will persist.
