A crypto rally that started on Monday is continuing, with Bitcoin price soaring to over $91,500, up by over $10,000 from its lowest level this month. Other top altcoins ike Merlin Chain (MERL), Dash, Kaspa, and Flare were among the top gainers.
The crypto market rally pushed the valuation of all tokens upwards to $3.12 trillion. This means that the crypto industry has added over $300 billion in value in the past few days.
Crypto Rally Mirrored the Performance in Stocks
One of the main catalysts for the ongoing crypto market rally is the ongoing stock market gains this week. The Dow Jones Index rose by 315 on Wednesday, while the S&P 500 and the Nasdaq 100 Indices rose by 50 and 200 points, respectively.
These indices have been in a strong uptrend in the past few days, such that they have erased losses made last week after the strong Nvidia earnings.
Analysts are highly optimistic that the stock market will continue rising in the near term. In a statement, JP Morgan Private Bank predicted that the S&P 500 Index will jump by 20% by 2028. It expects it to jump to $7,600 next year, joining other Wall Street banks like Deutsche Bank and Morgan Stanley that have delivered bullish estimates.
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Analysts point to the ongoing AI boom in the United States and the fact that the Federal Reserve will deliver several rate cuts next year. Also, corporate earnings have been strong, a trend that will continue in the near term.
Therefore, stocks have triggered gains in the crypto market by triggering a risk-on sentiment.
Federal Reserve Interest Rate Cuts
The crypto rally today is happening as the odds that the Federal Reserve will cut interest rates jump. Data compiled by Polymarket shows that the odds have jumped to 83%, much higher than this month’s low of below 40%.
Odds of a cut jumped after the Federal Reserve published its Beige Book on Wednesday. This report showed that economic activity slowed in recent weeks, with employment declining in the past few weeks. Another report released on Tuesday by ADP showed that the economy shed jobs last week m
Crypto prices and other risky assets do well when the bank is cutting interest rates or when officials turn dovish.
Crypto Market Rally Boosted by Dip Buying
Meanwhile, the crypto market rally is happening as investors continue buying the dip after the recent crash. It is common for investors to buy the dip whenever cryptocurrencies drop sharply.
More data shows the futures open interest continued rising this week. It started the week at around $120 billion, a figure that has now moved to over $135 billion.
This is a sign that investors are deploying more cash to the market. At the same time, short-sellers have continued to be liquidated, with the 24-hour figure rising by 6% to $323 billion. Bitcoin short liquidations jumped to $132 billion, while Ethereum and HYPE positions worth $52 billion and $26 million were liquidated.
The crypto market rally may continue during the Thanksgiving weekend now that the Bitcoin price has moved above the important resistance level at $90,000.
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