Bitcoin extends rally past $29,000

Bitcoin (BTC, Tech/Adoption Grade “A-”) continues to climb toward $30,000, having crossed $29,000 during the week leading up to New Year’s Eve. Note that data below reflect trading activity through noon on Thursday.

Indeed, the King of Crypto once again performed well – but the larger altcoins slightly outperformed.

That’s a good thing, of course. At the same time, our timing model suggests this rally may be on short time.

Still, a correction here would be healthy — refreshing, to use the old-school description of such “pauses” — because crypto’s long-term outlook has never looked brighter. The “store of value” story dominates right now, but, soon, adoption will be the buzz.

The Weiss 50 Crypto Index (W50) gained 15.17%, as Bitcoin and the largest cryptocurrencies sustained their momentum.

The Weiss 50 Ex-BTC Index (W50X) soared 22.93%, showing the most prominent altcoins outpaced the market leader.

Breaking down performance this week by market capitalization, we see that the largest cryptocurrencies outperformed smaller and mid-sized altcoins.

The Weiss Large-Cap Crypto Index (WLC) climbed 24.71%, as the large-caps continued to lead the rally.

The Weiss Mid-Cap Crypto Index (WMC) increased 16.16%. Mid-sized cryptocurrencies couldn’t keep pace with the large-caps, but they still booked solid gains.

The small-caps lagged behind the rest of the crypto market, as the Weiss Small-Cap Crypto Index (WSC) rose 6.64%.

Bitcoin continues to lead the crypto market higher as it eyes the next major milestone of $30,000 per coin. Despite slightly lagging behind the other large-cap cryptocurrencies, Bitcoin still climbed to a new all-time high past $29,000.

The King of Crypto increased its market dominance by two more percentage points to over 71%. This is the largest market share Bitcoin has held since September 2019.

Our timing model indicates that we may see a short-term pullback before the climb resumes. And resume it will.

Government spending is out of control, and central banks are printing money with reckless abandon. Indeed, they’ll be forced to continue with their irresponsible fiscal and monetary policies to continue propping up economies.

U.S. lawmakers recently agreed to a $900 billion stimulus package, with notable support of $325 billion going to small businesses, $120 billion going towards extending extra weekly unemployment benefits until March and $166 billion going to citizens in the form of direct checks to qualifying individuals.

In addition to macroeconomic factors illustrating the need for a sustainable alternative, institutions have started amassing Bitcoin to protect themselves from an uncertain future.

MicroStrategy Inc. (Nasdaq: MSTR) and Ruffer Investment Company Ltd. (LON: RICA) are the latest to seek exposure, with the two combining for nearly $2 billion in Bitcoin purchases.

Payment processors also understand the importance of preparing for a new wave of crypto adoption. Paypal Holdings Inc. (Nasdaq: PYPL) recently supported purchasing and storing cryptocurrency on its platform, and Square Inc. (NYSE: SQ) invested $50 million of its assets into Bitcoin.

Mainstream investment management companies are trying to offer exposure even in traditional equity markets. Exchange-traded fund (ETF) issuer VanEck has proposed an ETF for Bitcoin after withdrawing its previous proposals, and S&P Dow Jones Indices will be offering their crypto indexing service next year to provide reliable pricing data.

Institutional investors will continue piling into the space because they recognize the importance of crypto’s future adoption, and macroeconomic uncertainty reinforces its inevitability.

Volatility is a natural characteristic of an emerging market. And, make no mistake, crypto is still in its emergent phase.

But bullish catalysts will continue pushing and pulling prices higher over the long term, and that makes any short-term pullback a buying opportunity.