Bitcoin nears $21,000: can the crypto bull rally continue?

The bullish rally in the cryptocurrency market continues, although it has lost some steam. In the last 24 hours, Bitcoin (BTC) and Ethereum (ETH) have advanced around 1.5%, the former trying to reach $21,000 (yesterday it reached a high of $20,938) and the latter, $1,600. The world's largest cryptocurrency had not reached this level since last September 15, when 'The Merge' of ETH was completed.

The rally has allowed the cryptocurrency market to regain a market capitalization of $1 trillion for the first time since September 13, just a few days before 'The Merge' took place, largely due to the very high liquidation of positions in recent sessions. Is it possible that the rebound will continue?

Naeem Aslam, chief market analyst at AvaTrade, believes that investors should temper their enthusiasm for an extension of the rally because "what we want to see is consistency in the momentum and looking at the price action, it doesn't look like it is going to happen. All in all, the expert stressed that, "generally," the rally in cryptocurrencies "occurs during these months, like when Bitcoin broke through the $10,000 mark during the winter months."

"That sent the price soaring as high as $20,000. History may repeat itself and the next few months could be interesting for cryptocurrencies," stated Aslam.

For his part, Edward Moya, senior market analyst at Oanda, believes that this rally is a consequence of expectations of an upcoming end to monetary tightening. "The Bank of Canada's surprise is a turning point for tightening expectations," he explained, "The 'cryptos' will struggle with the deteriorating global growth outlook, but the widespread pain resulting from the bond market sell-off could soon be over."

The expert highlighted that BTC is "comfortably" above $20,000 and that in the coming days it will try to stabilize at that level until the Federal Reserve (Fed) unveils its next move on November 2. In this regard, it is worth noting that while the market already takes for granted that the U.S. central bank will raise interest rates by 75 basis points in November, data from CME's FedWatch tool gives a 51.5% probability that the Fed will execute a 50 basis point hike in December versus 42.5% that it will execute a fifth consecutive 75 basis point hike.

"The economy is showing more signs of weakening and that is helping investors to be confident that the Fed will be in a better position to slow its pace of tightening after next week's FOMC meeting," noted Moya, "If risk appetite remains healthy, Bitcoin could rise towards the $22,500 level."

On the other hand, the very strong rises of 16.82% in Dogecoin (DOGE) stand out after Elon Musk's latest antics in relation to the purchase of Twitter. The tycoon, who has come to describe himself as 'Tweet boss' on the social network, walked into Twitter's San Francisco headquarters yesterday carrying a toilet, punning on the company's acquisition. The deadline to acquire the company and avoid going to trial ends tomorrow, on Friday.

DOGE and Musk have been closely related for a long time and the tycoon has shown a lot of interest in the 'cryptomeme'. In this regard, private messages were leaked last September in which the world's richest man saw a potential DOGE application on Twitter. "I have an idea for a blockchain social media system that does both payments and short text messages/links like Twitter. You have to pay a tiny amount to register the message on the blockchain, which will eliminate the vast majority of spam and bots. There is no throat to choke, so freedom of speech is guaranteed," Musk stated, according to recordings cited by 'Techcrunch'.

It is unclear how many Dogecoins Elon Musk owns, but there has been speculation that he could be a whale with more than 36 billion of these 'tokens' to his credit. This would make him the biggest beneficiary of speculative movements around this currency.

As for the rest of the market, the most notable movements are in Shiba inu (SHIB) and Ripple (XRP), which accumulated rises of 5% and 1% in the last 24 hours, respectively. Cardano (ADA), Solana (SOL), Polkadot (DOT) or MATIC (Polygon) seem to have tempered the enthusiasm of the last few days, although they are recording strong rises in the last seven days.