Bitcoin briefly surged above $24,000 on Friday, posting its best monthly performance in nine months as it continued to track higher risk assets.
The world’s largest digital currency hit $24,412 earlier on Friday, hitting a six-week high, according to data from CoinDesk, its highest level in more than six weeks. Bitcoin has since pared some of those gains and was sitting just below $24,000 by the end of the session.
The cryptocurrency rose 4.8% this week and ended July up 26.8% for its best month since October and the first positive month in four.
Bitcoin’s rally began after the Federal Reserve raised interest rates on Wednesday, but signaled that the pace of those increases may slow. This sparked a rally in US stocks.
Cryptocurrency moves have traded broadly in line with US equities lately, especially following the tech-heavy Nasdaq, which has surged strongly over the past two days.
Other cryptocurrencies, including ether, were up sharply on Friday.
“Overall, I think the markets reacted positively to the Fed’s comments and arguably priced in most of the rate hikes,” Vijay Ayyar, vice president of business development and international at Luno Exchange, told CNBC, per SMS.
“There seems to be a lot of liquidity on the sidelines, which is now coming in based on the last few months of consolidation/downside pressure, which is now diminishing,” he added.
Still, bitcoin is down about 48% this year and remains more than 60% off its all-time high price of $68,990.90 that was reached in November.
The crypto market has been plagued by a number of issues, including the collapse of the algorithmic stablecoin terraUSD, which triggered a series of events that led to the bankruptcy of lending platform Celsius and hedge fund Three. Arrows Capital.
Market participants are trying to determine where the bottom is for bitcoin and whether the deleveraging and industry upheaval is over. Market participants told CNBC they want to see an improving macroeconomic picture and the completion of deleveraging before bitcoin’s bottom is found.
Bitcoin has been trading in a range of around $18,000 to just over $24,000 since mid-June, and Luno’s Ayyar said investors have been hoarding bitcoin at these prices.