It was an eventful weekend, to say the least. With the capture and ousting of Venezuelan president Nicholas Maduro, plenty of uncertainty heading into today's session left me considering whether cryptocurrencies would end the day higher or lower, given the mixed reaction to this very important news.
On that front, Bitcoin's (BTC 0.86%) price action is worth watching. As of 2:00 p.m. ET, the market's reaction to this weekend's action has been muted (if not positive), with Bitcoin surging 4.9% since Friday's close. That's a significant move, and one that has propelled the price of the world's largest digital asset back to nearly $95,000.
CRYPTO: BTC
Key Data Points
Let's dive into this weekend's happenings and what investors are considering when it comes to the investing thesis around Bitcoin today.
Risk-on sentiment appears to be back
Source: Getty Images.
In concert with lower oil prices, bullish expectations surrounding federal tax refunds in Q1 and the possibility of a so-called "shadow Fed" emerging, investors have several reasons to adopt a risk-on view when it comes to equities and cryptocurrencies. Both asset classes have become increasingly correlated in recent years, and Bitcoin's performance has been driven more by macroeconomic catalysts, making this macro story important to watch.
I believe Bitcoin's price action today reflects investors seeking to add exposure to risk assets, anticipating another leg higher in this impressive bull market following the pandemic. With concerns around recessionary headwinds diminishing, I wouldn't be surprised to see this rally continue through the end of the first quarter.
From a Bitcoin-specific fundamentals perspective, there have also been signs that transaction volume is picking up. This is a trend that's been in play since roughly April of last year, when daily transactions were around 300,000 (today, that number is right around 500,000).
All told, the setup for Bitcoin investors looks a lot better today than it did last week.
