- Bitcoin and Ethereum, the two major cryptocurrencies, hit a six-week high with an 8% and 6% increase respectively, boosted by US Federal Reserve Chair Jerome Powell’s announcement of a temporary pause in interest rate hikes.
- Cryptocurrency market recovery is not a short squeeze, according to CryptoQuant CEO Ki Young Ju, but rather a significant purchase of Bitcoin.
The cryptocurrency market experienced a broad recovery on Wednesday, as Bitcoin and Ethereum, two flagship cryptocurrencies, surged to six-week highs. Bitcoin jumped 8%, breaking the $29,000 barrier, while Ethereum saw a 6% increase, surpassing $1830 in the past 24 hours.
Simultaneously, Jerome Powell, US Federal Reserve Chair, announced during his testimony to the US House Financial Services Committee that the current pause in interest rate hikes is a short-lived one. He pointed out that further hikes are probable, given that inflation remains above its target. The CME FedWatch Tool now indicates an 80% chance of a 25 basis points increase at the July 26 FOMC meeting.
While market analysts anticipated a short squeeze event causing this significant recovery and subsequent price pullback, CryptoQuant CEO Ki Young Ju offered a contrasting viewpoint. He explained that the rally was not triggered by a short squeeze, but rather by substantial Bitcoin purchases.
The positive market sentiment was also bolstered by BlackRock’s iShares filing for a Bitcoin ETF with the US SEC last week. This move has encouraged other financial giants to file their Bitcoin ETF applications, further escalating institutional interest in the cryptocurrency market.
Adding to the momentum, EDX Markets – a crypto exchange backed by Citadel Securities, Fidelity Digital Assets, and Charles Schwab – launched on Tuesday. The exchange initially supports Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH), all of which led Wednesday’s market rally. Notably, BCH saw a remarkable increase of over 20% in the last 24 hours.
BitMEX co-founder Arthur Hayes was among the first to anticipate this rally. He suggested that the impact of the US Treasury General Account (TGA) refill on US dollar liquidity would not be as severe as predicted, potentially sparking a rally in risk assets like Bitcoin.
The surge in Bitcoin’s price above $29,000 can be attributed to substantial buying activity from whales and an influx of institutional investors into the crypto market. At the same time, Ethereum rallied to $1850, up 6%. Both cryptocurrencies are showing a promising upward trajectory, buoyed by Powell’s remarks and the growing institutional interest.