In early Asian trading hours, Bitcoin (CRYPTO: BTC) briefly surged above $66,000, reaching a high not seen in recent weeks before settling at $64,980, a 3.7% increase.

What Happened: Ethereum (CRYPTO: ETH) followed suit, trading up 3.2% at $3,470.

The recent price action underscores a renewed bullish sentiment in the cryptocurrency market.

Bitcoin's recent trajectory has been notably volatile.

The digital asset plummeted to $53,500 in early July as wallets from the now-defunct exchange Mt. Gox began their long-awaited Bitcoin repayments.

This movement initially triggered bearish forecasts, shaking market confidence.

However, recent favorable developments have reignited bullish momentum.

One such development involves wallets linked to the German state of Saxony, which have completely liquidated their Bitcoin holdings.

This sell-off appears to have been absorbed by the market, offering short-term relief and bolstering demand.

Simultaneously, former President Donald Trump's pro-crypto stance has injected new optimism into the market.

Trump's announcement of crypto-friendly Senator J.D. Vance (R-Ohio) as his vice-presidential running mate on Truth Social has been widely circulated, further buoying market sentiment.

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Why It Matters: In addition to political influences, institutional interest in Bitcoin remains robust.

Bitcoin spot ETFs reported a net inflow of $423 million on July 16, marking the eighth consecutive day of positive net inflows, according to data from SoSo Value.

Notably, BlackRock's ETF (NASDAQ:IBIT) saw a single-day inflow of $260 million, while Fidelity's ETF (BATS:FBTC) attracted $61.053 million in the same period.

This consistent inflow of funds highlights sustained institutional confidence in Bitcoin.

The Mt. Gox Bitcoin repayment process continues to be a focal point for the market.

Recently, a significant transaction involving 48,641 BTC was executed from wallets associated with the Mt. Gox Trustee to Kraken Exchange.

This movement, which saw 36% of the Bitcoin distribution to creditors, marks the first substantial transfer in the repayment process.

The Mt. Gox Trustee still holds 141,686 BTC, set to be distributed over time.

In an emailed note to Benzinga, Eugene Cheung, VP and Head of Institutions at Bybit said after the German Government recently exhausted its BTC selling, the market will see near-term relief and renewed demand flowing in to support the market.

"Market profitability stays strong, with most of the coin supply held at a favorable cost below the current spot price. However, the looming overhang of Mt. Gox coins contributes to a sense of caution in the market. The distribution of the Mt. Gox bankruptcy estate has been closely followed by the industry for years and is likely the most anticipated sell-event in BTC history," Cheung said.

What's Next: These topics are expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.

• Bitcoin Plunges To $56K As German Government Continues Liquidating Its Holdings