A crypto rally is underway, with Bitcoin and most altcoins being in an upward trajectory. Bitcoin price surged above $103,000, while the market capitalization of all coins jumped by over 6% to $3.20 trillion.
Some of the top gainers were altcoins like Fartcoin, Sonic, SPX6900, Sky, and Virtuals Protocol, which soared by over 20%. Here are the top reasons why Bitcoin and these altcoins are going up.
Crypto Rally is Happening After Muted Iranian Response
Bitcoin and altcoins are rising as hopes fade that the recent geopolitical events in the Middle East will escalate. This is after Iran launched a carefully telegraphed missile attack on US troops in Qatar that did not hurt anyone.
Iran understood that killing American troops would have led to a widespread war in the region. This explains why U.S. stock indices, such as the Dow Jones and the Nasdaq 100, jumped by over 1% on Monday, while crude oil prices plunged.
The best-case scenario for the crypto rally is if the crisis in the region ends, as this will eliminate one of the biggest risks in the market.
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Fed Officials are Talking About Rate Cuts
The cryptocurrency rally is underway as Federal Reserve officials begin discussing interest rate cuts. In a statement on Monday, Michele Bowman, a top Fed official, noted that she supported a rate cut in July, saying that the impact of tariffs on inflation will be muted. She said:
“I think it is likely that the impact of tariffs on inflation may take longer, be more delayed, and have a smaller effect than initially expected, especially because many firms front-loaded their stocks of inventories.”
Her statement aligned with that of Christopher Waller, who said that he was comfortable with a rate cut in the upcoming meeting in July.
These statements are at odds with what Fed officials said in last week’s monetary policy meeting. Most of these officials noted that the bank would deliver just two cuts this year, potentially starting during the September meeting.
The upcoming two-day testimony of Jerome Powell in Congress will be important, as he may signal a change of tone, especially following recent criticism from Trump.
Potential Dead Cat Bounce
The potential catalyst for the ongoing crypto rally could be a dead cat bounce (DCB). A DCB is a situation where an asset in a free-fall bounces back briefly and then resumes the downward trend.
It occurs due to temporary buying pressure as investors buy the dip, believing that an asset is oversold or undervalued. Historically, these rebounds tend to be temporary and lead to more losses over time.
Bitcoin Price Cup and Handle
Further, the ongoing crypto market rally is happening because the Bitcoin price is forming a cup-and-handle pattern. The recent pullback was part of the handle section of this pattern. Therefore, if this pattern works, there is a likelihood that Bitcoin and most altcoins will continue their strong uptrend.
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