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Leading cryptocurrencies jumped on Thursday after a dovish shift in the Federal Reserve’s rate outlook lifted risk appetite.
Risk-On Sentiment Back?
Bitcoinclimbed above $82,000, buoyed by a 56% surge in trading volume. Ethereumspiked to an intraday high of $2,526, while XRP and Dogecoinwere up 6% each.
Cryptocurrency-related stocks also fell, withStrategy Inc.(NASDAQ:MSTR) and Bitmine Immersion Technologies Inc.(NYSE:BMNR) closing up 17.56% and 14.70%, respectively.
Over $550 million was liquidated from the cryptocurrency market in the last 24 hours, with $470 million in bearish shorts alone wiped out, accordingto Coinglass data.
Bitcoin’s open interest soared 7.79% in the last 24 hours, indicating an influx of new money into the derivatives market. Notably, Binance’s retail and whale derivatives traders positioned against this move, cutting long exposure and turning net “bearish.”
“Greed” sentiment dominated the market, accordingto the Crypto Fear & Greed Index.
The global cryptocurrency market capitalization expanded 4.49% in the last 24 hours to $2.72 trillion.
Stocks Extend Gains
Stocks lifted higher on Thursday. The Dow Jones Industrial Averagerallied 624.16 points, or 1.18%, to end at 53,686.11. The S&P 500 spiked 1.06% to close at 7,747.71,while the Nasdaq Composite gained 1.4% to settle at 26,584.06.
Fed Governor Christopher Waller signaled he could back leaving interest rates unchanged this month. If August inflation “comes in hot,” he said monetary tightening would be on the table.
The probability of a rate hike at the Fed’s meeting later this month fell further, from 63% to 50% in 24 hours, according to the CME FedWatch tool.
Bitcoin’s Bull Market Signals
Michaël van de Poppe, a widely followed cryptocurrency analyst and trader, speculated whether Bitcoin would follow its usual four-year cycle or a “shorter version.”
“It could theoretically be that Bitcoin had a mid-cycle correction, and we’re about to enter a 2016-2017 type of rally, with a peak earlier than the regular 4-year cycle top,” Van De Poppe stated.
On-chain analytics firm CryptoQuant noted that Bitcoin shows strong bullish signals with a Bull Score of 70, yet new buyer demand remains weak, while short covering in futures markets is driving most of the recent rally.
“$83,000 confirms the bull market. Until then, it’s still only a rally,” CryptoQuant stated.
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