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What led to the major narrative change and the $500b+ freshly entered capital?
ByJordan Lyanchev
The cryptocurrency market was essentially muted for many, many weeks. Ever since the May surge from BTC to over $82,000 and the subsequent crash to under $58,000 on July 1, the market has remained dull with little to no movement from the larger caps.
Then it all changed within hours on Wednesday afternoon as something unusual happened. Essentially all crypto assets exploded suddenly to new local peaks (some to ATHs, such as HYPE), with BTC leading the pack with a surge from under $65,000 to almost $80,000 before it pulled back slightly.
The speed of the rally and the subsequent decline suggest that leverage, rather than a single fundamental catalyst, has played a big role.
From Calm to $500B+ Rally
The analysts at the Kobeissi Letter weighed in on the recent market change, indicating that crypto was effectively “frozen” for 110 consecutive days – between May 1 and August 19. That might be a bit of an exaggeration since BTC experienced some volatility within this period, including the aforementioned surge above $80,000 and the crash that followed.
Nevertheless, the real change happened abruptly at around 8:30 AM ET on August 19, when the entire market went on a tear. Less than a day later, the market had experienced what the Kobeissi Letter described as its “seventh-largest liquidation event on record.”
This unexpected recovery didn’t die immediately, as many of the previous attempts did. Just the opposite; the deleveraging was followed by another surge. Within a day and a half, the total crypto market cap had increased by around $500 billion as BTC approached $80,000 for the first time since mid-May.
There was no single crypto-specific announcement large enough to explain the entire move. However, it coincided with Trump’s Crypto Summit in the <a href="https://xpertsstudio.com/clarity-act-hits-binary-stage-as-white-house-says-crypto-deal-is-near-bitcoin-market/" title="CLARITY Act Hits ‘Binary Stage’ as White House Says Crypto Deal is Near | Bitcoin Market”>White House and was boosted by the Treasury Department’s decision to increase purchases of longer-dated government debt.
Source: cryptopotato.com