The cryptocurrency market experienced a significant surge on Friday, with Ethereum (ETH) and Bitcoin (BTC) leading the charge and reviving the upward momentum seen in the previous week that had propelled it to new all-time highs.
Among the notable developments, the market’s leading altcoin skyrocketed above the $4,700 mark while recording double-digit gains and edging closer to the $4,878 record highs it reached during the last crypto bull cycle four years ago.
After enduring a prolonged phase of consolidation and breakdown, ETH’s recent gains reflect renewed optimism in the market, particularly following comments from Federal Reserve (Fed) Chair Jerome Powell.
Powell’s remarks during his speech at the Jackson Hole Economic Symposium suggested that rate cuts could be on the horizon, a sentiment that tends to favor assets like Bitcoin and altcoins.
Lower interest rates make investments in stocks and digital currencies more attractive compared to traditional interest-yielding options, such as bonds. Additionally, a reduction in rates typically weakens the dollar, further enhancing the appeal of cryptocurrencies.
The positive market sentiment was not limited to Bitcoin and Ethereum; other altcoins also enjoyed substantial price increases. XRP rose by 5%, Solana (SOL) saw a 4% gain, and Binance Coin (BNB) surged by 8%, reaching a new record price beyond the $882 mark, which now serves as a resistance level for the token.
Manuel Villegas, an analyst at Julius Baer, noted in a research report that the correlation between cryptocurrencies and equities is currently strong.
He emphasized that the market mood is likely to be highly responsive to comments from the Jackson Hole meeting of monetary authorities and any subsequent reactions from fiscal authorities.
On social media platform X (formerly Twitter), market experts weighed in on the implications of Powell’s statements highlighting what could come next for the broader cryptocurrency market.
Doctor Profit remarked that Powell’s announcement was the most anticipated event for both the stock and crypto markets, suggesting that the market had already priced in the likelihood of upcoming rate cuts.
He cautioned that a “sell the news” reaction could soon occur, as traders might capitalize on the gains made in anticipation of these developments.
In a social media post, Lark Davis asserted that the Federal Reserve Chair’s comments have effectively opened the door for potential rate cuts as early as September, hinting that the fourth quarter of the year could end up being “extremely bullish.”
As of this writing, Ethereum is trading at $4,740. It has the best performance of the day among the top cryptocurrencies, with a significant 13% uptrend witnessed in today’s trading session.
Bitcoin, on the other hand, is still far from the record $124,000 level reached last week, despite its 4% surge in the last 24 hours. Trading at $116,000, Bitcoin is still 6% below its all-time high.
Featured image from DALL-E, chart from TradingView.com
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