Crypto is going up today, August 27, with Bitcoin price reaching $112,000 and Ethereum surging to $4,600. Top altcoins like Bonk (BONK), Hedera Hashgraph (HBAR), and Dogwifhat (WIF) were among the best-performing tokens.
The Bonk price jumped by over 7.5%, while the HBAR and WIF prices jumped by over 6%. Some of the other top-performing tokens like Cronos, Hyperliquid (HYPE), Story (IP), and Sky (SKY). This jump pushed the market capitalization of the crypto market to over $3.8 trillion.
Why is Crypto Going Up Today?
The crypto market is rising today after falling in the past few days. This crash happened for three main reasons.
First, the rebound was likely because of profit-taking among investors following the recent crash. It is common for the crypto market and other assets to bounce back after falling sharply as investors buy the dip.
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Second, cryptocurrency prices are rising after Donald Trump announced that he had fired Lisa Cook, a Federal Reserve Governor. Cook, whom Joe Biden appointed, has vowed to fight for her job, potentially all the way to the Supreme Court.
Trump’s goal is to have control of the Fed and ensure that the bank slashes interest rates. Her firing, if allowed by the courts, will allow him to proceed with firing Jerome Powell and replace him with an official supportive of large interest rate cuts. He has championed cutting interest rates by as much as 300 basis points.
Third, and most notably, the ongoing crypto rebound could be part of a dead-cat bounce, a situation where an asset in a free fall stages a brief comeback and then resumes the downward trend. It is also known as a false breakout.
Additionally, there are signs of strong demand for crypto assets. Spot Bitcoin and Ethereum ETFs attracted inflows on Monday as several companies announced accumulation.
For example, SharpLink announced that it had acquired Ethereum tokens worth over $252 million, while Strategy and Metaplanet continued to accumulate Bitcoin.
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Will the Crypto Market Rally Continue?
There is a significant risk that the ongoing crypto market rally will be brief, as evidenced by the recent jumps.
The main risk is that Bitcoin, which moves the crypto market, has formed the highly bearish rising wedge chart pattern on the weekly chart, and the two lines are about to converge.
Therefore, the cryptocurrency market is on a downward trajectory that may persist for the coming weeks or months. This view will be confirmed if Bitcoin continues its downtrend and moves below $100,000.
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