Bitcoin, Altcoins Bounce Back, How High Can They Go
After an abysmal showing yesterday, the crypto market is experiencing a major rally. Bitcoin prices were down by close to 6% yesterday. However, BTC has rallied since then to trade at $19,333. It has increased close to 3% in the last 24 hours.
Altcoins are showing a stronger performance than Bitcoin. The Ethereum price was down by 8% yesterday. However, it is currently up by 8% in the last 24 hours and is trading at $1,635. Meanwhile, BNB, XRP, and Solana prices are up by 5%-6%.
Ethereum Classic continues its topsy-turvy movement. After increasing by more than 25%, it was down by 9% yesterday. However, it has rallied close to 10% in the last 24 hours.
Why Crypto Is Bouncing Back
Crypto prices struggled as a hawkish Fed was being priced in by the investors. However, it appears from the crypto rally that the investors have stabilized. The general market stabilized as well. S&P 500 rose by 1.8% while NASDAQ 100 rose by 2.1%.
As the crypto market value increased during the pandemic, it is more strongly correlated to the traditional markets than ever. Beta is a measure of how much an asset is correlated to the general market. Crypto assets have a beta of 2. This means if the general market increases or decreases by 1%, crypto assets move by twice as much.
In this aspect, Bitcoin and other cryptocurrencies behave like tech stocks. Therefore, it is strongly correlated to the tech-oriented NASDAQ. NASDAQ 100 rose by 2.1%, hence the crypto rally.
How Long Can The Crypto Rally Sustain
The length of this crypto rally will depend upon multiple factors. The Ethereum merge is expected to go live anytime in the next week. Experts believe it will be an extremely bullish event for crypto. The investors will also look at the Consumer Price Index data that will be released on September 13th.
The CPI data will define the Federal Reserve’s stance on tackling inflation, which can have a major impact on crypto prices.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.