The Bloomberg Dollar Spot Index tumbled 0.9% on Friday after surging to the highest on record this week. Image Credit: Gulf News

California: Bitcoin rallied the most since July, breaking out of the narrowest trading range in about two years, as a drop in the dollar renewed demand for battered risk assets worldwide.

The largest cryptocurrency by market value advanced as much as 10.1 per cent to $21,341 as of 12:05 pm in New York. The increase was the most since July 19. Bitcoin is outperforming most of the other top tokens such as Ether and Cardano. Bitcoin and Ether are still both down about 50 per cen5t this year.

“It’s too early to predict that we are approaching another bull run, but if Bitcoin regains a higher support level between $22,000-$25,000 then it may boost investor confidence and ease off the selling pressure across crypto assets,” said Tarusha Mittal, co-founder of crypto staking platform UniFarm. “Given the fact that central banks around the world remain cautious due to the high inflation numbers, the current surge in the crypto market might be short-lived,” she adds.

The Bloomberg Dollar Spot Index tumbled 0.9 per cent on Friday after surging to the highest on record this week. Every Group-of-10 currency strengthened against the greenback, with the risk-sensitive Australian dollar and Norwegian krone leading gains.

Bitcoin has been stuck in the tightest trading range in almost two years in September, in part reflecting uncertainty about how far central banks will go in raising interest rates in the face of a slowing global economy. Amid the lack of direction, some analysts have pointed to activity in futures markets as suggesting Bitcoin may be poised to break out.

Riyad Carey, an analyst at crypto researcher Kaiko, highlighted a jump in open interest in Bitcoin futures on some of the biggest exchanges.

“It appears that there was a bit of pent up demand for BTC (and BTC volatility), which has traded in a relatively tight range for the past couple months with decreasing volatility,” Carey said in a direct message over Twitter.

Friday’s move was unusual in that Bitcoin outperformed almost all other top tokens tracked by Bloomberg. The MVIS CryptoComparte Digital Assets 100 Index advanced 6.1 per cent. Smaller so-called altcoins typically fluctuate by larger magnitudes than Bitcoin, the industry’s bellwether.