- Bitcoin (BTC) hit a daily high of $67,781, recording a recovery of more than 10% in just a few hours.
- Ether (ETH) erased its previous 6% drop, boosted by news about a confidential investigation and the SEC.
The cryptocurrency markets witnessed a sharp rebound, with Bitcoin (BTC) targeting a remarkable $67,000 benchmark on Wednesday. This surge came in the wake of comments made by U.S. Federal Reserve Chair Jerome Powell, who maintained a dovish stance despite the central bank’s outlook for three rate cuts this year, in the face of hotter-than-expected inflation figures.
The Surge of Bitcoin and Ether
Bitcoin (BTC) astonishingly hit a daily high of $67,781, marking a recovery of more than 10% from the levels seen just hours earlier. Similarly, Ether (ETH) managed to erase a 6% dip experienced earlier in the day.
This dip had been triggered by news reports about the Ethereum Foundation facing a confidential inquiry from an unnamed government, alongside considerations by the U.S. Securities and Exchange Commission to classify the asset as a security.
Altcoins Join the Rally
Not to be left behind, altcoins such as Dogecoin (DOGE), Litecoin (LTC), and Bitcoin Cash (BCH) led the gains among major cryptocurrencies. This was largely attributed to the crypto community finally taking notice of a Coinbase plan to offer futures contracts on these currencies, a plan that had been posted on a U.S. regulator’s website several weeks prior.
Traditional Markets and Crypto Correlation
Interestingly, traditional markets also experienced an uplift alongside cryptocurrencies. The S&P 500 index jumped nearly 1% to hit a fresh all-time high, while the tech-heavy Nasdaq-100 gained 1.3%. Moreover, the U.S. dollar index (DXY) saw a decline of nearly 0.7% from its session high, indicating a greater risk appetite among investors.
The Impact on Crypto Markets
The crypto market’s sharp recovery can be attributed to a combination of factors. Firstly, the Federal Reserve’s decision to maintain a steady course on interest rates and rate cuts, despite inflation concerns, played a critical role.
Additionally, the resilience of traditional markets, particularly the S&P 500 and Nasdaq-100, contributed to boosting investor confidence across the board.
Analysis of Investor Sentiment
The recovery also highlighted a shift in investor sentiment. The initial risk aversion seen prior to the Fed’s decision gave way to a more optimistic outlook, as evidenced by the broad-market gains across both traditional and cryptocurrency markets.
The Role of Regulatory News
Furthermore, the regulatory news surrounding Ethereum and the potential classification of Ether as a security by the SEC did not deter the overall market recovery.
This suggests that, while regulatory scrutiny remains a significant factor for individual assets, the broader market can still find positive momentum through other developments.
