A stunning assortment of bitcoin, litecoin, and ethereum tokens.
Chris Ratcliffe | Bloomberg | Getty Images
Cryptocurrencies experienced a surge in value on Wednesday as investors grappled with the market’s summer lull and eagerly anticipated the Federal Reserve’s annual meeting in Jackson Hole, Wyoming, on Friday.
Bitcoin saw a rise of over 2% and reached $26,517.09. Following a sudden drop below the $26,000 mark last week, Bitcoin has been fluctuating around this level and recorded its worst week since May. Ether also saw an increase of over 3% and traded at $1,684.20.
Binance coin, the third-largest cryptocurrency excluding stablecoins, recorded a gain of 4%. Tokens associated with Ethereum competitors also saw an increase in value — Solana’s coin surged by 6%, while Cardano’s experienced a gain of 5.5% and Polygon’s rose by 4%.
The rise in the cryptocurrency market coincided with gains in the major stock indexes. Crypto assets experienced a sharper surge around noon ET, but the exact cause of this sudden movement remains unclear.
“As bitcoin attempts to regain the $30,000 mark, you can expect to see significant volatility,” said Callie Cox, an analyst at investment firm eToro. “With low trading volumes during the summer season, the recipe for day-to-day volatility is complete. Bitcoin prices have displayed more resilience today due to hopes of lower interest rates, and a few hours of stable trading may have been sufficient to attract buyers once again.”
In recent weeks, the market has also been concerned about remarks from Fed Chair Jerome Powell during the central bank’s meeting in Jackson Hole, speculating that he may deliver a more hawkish speech regarding rate hikes. This speculation could now be causing a sell-the-rumor, buy-the-news scenario.
Cryptocurrencies have been experiencing a slump since spring due to limited liquidity and thin trading volumes, which have amplified both upward and downward movements. This has been particularly evident during the traditionally sluggish month of August.
“The correlation between equity indices and bitcoin has nearly disappeared in 2023,” said Sam Callahan, lead analyst at Swan Bitcoin. “Bitcoin’s price appears to be rebounding after a sharp sell-off last week, further intensified by over $2.7 billion worth of liquidated leveraged positions.”
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