Why the Crypto Market is Rising Today

The cryptocurrency market is showing signs of life again, with a nearly 4% jump, as its market cap hit almost $4 trillion in the past 24 hours. Meanwhile, with Bitcoin up almost 4% from yesterday, crossing the $116,800 mark, a remarkable 93% increase from one year ago.

This rally has surprised the entire crypto market while traders are wondering the reason behind this massive jump.

Let’s break down what’s driving this rally.

Powell Hints at Rate Cuts In Sept

Federal Reserve Chair Jerome Powell’s recent speech from Jackson Hole strongly hinted at upcoming interest rate cuts, encouraging investors to move into risk-on assets like cryptocurrencies. Meanwhile, the CME FedWatch tool now shows a 75% chance of a cut

Powell’s softer stance pushed investors toward riskier assets like crypto. Bitcoin quickly bounced from $111,600 to above $117,000, showing how strongly markets react to Fed signals.

Bitcoin Spot ETF Outflows Drop Sharply

Another big reason was the sharp drop in Spot Bitcoin ETF outflows. After billions left earlier in the week, starting with $523.3 million on August 19, $315.9 million on August 20, and $194.4 million the other day, the outflow sharply dropped to just $23.2 million on August 22.

This shows institutions are holding their positions instead of cashing out, giving markets a fresh boost of confidence.

Ethereum Saw Big Gains

Ethereum also saw a big push, climbing to near a new high $4,735. A big reason behind this move is strong support from institutions. SharpLink announced a $1.5B buyback, and Japan’s SBI bank invested in Circle to grow USDC.

At the same time, gas fees on Ethereum are now at record lows, making it cheaper for people to use DeFi.

According to CoinGlass data, the past 24 hours saw 176,721 traders liquidated, with total liquidations reaching $752.96 million. Short sellers were hit hardest, with nearly $463 million in short positions wiped out.

Ethereum accounted for more than half the overall liquidations ($385.2 million), while Bitcoin recorded $111.76 million in short liquidations. This forced buying helped push crypto prices higher, adding to today’s rally.

Altcoins Ride the Momentum

The market rally today isn’t limited to Bitcoin and Ethereum alone, major altcoins like XRP, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) have also posted substantial gains.

On top of this, the Altcoin season index has seen a jump and is currently standing at 57, indicating the altcoin season is near.

Innehållet på den här sidan tillhandahålls av tredje part. Om inte annat anges är OKX inte författare till den eller de artiklar som citeras och hämtar inte någon upphovsrätt till materialet. Innehållet tillhandahålls endast i informationssyfte och representerar inte OKX:s åsikter. Det är inte avsett att vara ett godkännande av något slag och bör inte betraktas som investeringsrådgivning eller en uppmaning att köpa eller sälja digitala tillgångar. I den mån generativ AI används för att tillhandahålla sammanfattningar eller annan information kan sådant AI-genererat innehåll vara felaktigt eller inkonsekvent. Läs den länkade artikeln för mer detaljer och information. OKX ansvarar inte för innehåll som finns på tredje parts webbplatser. Innehav av digitala tillgångar, inklusive stabila kryptovalutor och NFT:er, innebär en hög grad av risk och kan fluktuera kraftigt. Du bör noga överväga om handel med eller innehav av digitala tillgångar är lämpligt för dig mot bakgrund av din ekonomiska situation.