Bitcoin, Altcoins bounce back, how high can they go
After a miserable showing yesterday, the crypto market is experiencing a big upswing. Bitcoin prices fell by close to 6% yesterday. However, BTC has rallied since then to trade at $19,333. It has increased by almost 3% in the last 24 hours.
Altcoins show a stronger performance than Bitcoin. Ethereum price fell by 8% yesterday. However, it is currently up 8% in the last 24 hours and is trading at $1,635. Meanwhile, BNB, XRP and Solana prices are up 5-6%.
Ethereum Classic continues its frenetic movement. After rising more than 25%, it was down 9% yesterday. However, it has risen close to 10% in the last 24 hours.
Why encryption bounces back
Crypto prices struggled as a hawkish Fed was priced in by investors. However, it appears from the crypto rally that investors have stabilized. The general market also stabilized. The S&P 500 rose 1.8% while the NASDAQ 100 gained 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 that if the general market rises or falls by 1%, crypto assets move twice as much.
In this aspect, Bitcoin and other cryptocurrencies behave like technology stocks. Therefore, it is highly correlated to the technology-oriented NASDAQ. The NASDAQ 100 rose 2.1%, hence the crypto rally.
How long can the crypto rally be sustained
The length of this crypto rally will depend on several factors. The Ethereum Merger is expected to go live sometime next week. Experts believe it will be an extremely bullish event for crypto. Investors will also look at the consumer price index data that will be released on September 13.
The CPI data will define the Federal Reserve’s stance on tackling inflation, which could have a big impact on crypto prices.
The content presented may include the author’s personal opinion and is subject to market conditions. Do market research before investing in cryptocurrencies. The author or publication has no responsibility for your personal financial loss.
