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Bitcoin climbs to highest in nearly two weeks

Bitcoin climbs to highest in nearly two weeks

FILE PHOTO: A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. REUTERS/Dado Ruvic/File Photo

NEW YORK/LONDON :Bitcoin rose on Friday to its highest level since around mid-September, bolstered in part by seasonal factors as well as supportive comments overall from U.S. Federal Reserve Chairman Jerome Powell on Thursday.

In testimony to Congress, Powell said the Fed had no intention of banning cryptocurrencies, in response to a question from House Representative Ted Budd.

Some analysts also said October is typically a bullish month for digital assets, with September historically a bearish period for the sector.

"The digital asset market is benefiting both from the seasonality effect as well as generally positive market fundamentals," said Ulrik K.Lykke, founder of crypto assets hedge fund ARK36.

"Q4 has often seen strong performances and the expectation the trend will continue this year can become a self-fulfilling prophecy. It is possible that we will see new all-time highs in Q4, especially that on-chain data, particularly in the case of bitcoin, seem to indicate a potential for a strong bull market continuation."

He also cited Powell's comments on Thursday as one factor for bitcoin's positive price action.

The largest cryptocurrency was last up 9.3per cent at US$47,910, after hitting a high of US$48,236.08. If gains are maintained, bitcoin would be on pace to post its largest daily percentage gain since mid-June.

Smaller coins ether and XRP, which tend to move in tandem with bitcoin, were up 10.1per cent at US$3,301 and 8.5per cent at US$1.0326, respectively.

Joseph Edwards, head of research at Enigma Securities in London, also said spiking volumes on crypto derivatives exchanges was a possible driver for the moves. Derivatives trading often influences spot prices in bitcoin markets.

In the futures markets, bitcoin showed a net short position of -883, the smallest since mid-August, data from the Commodity Futures Trading Commission released on Friday showed.

(Reporting by Gertrude Chavez-Dreyfuss in New York and Tom Wilson in London; Editing by Saikat Chatterjee, Chizu Nomiyama and Richard Chang)

Source: Reuters

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