Leading cryptocurrencies rebounded Tuesday amid increased expectations of a rate cut following Federal Reserve Governor Lisa Cook’s removal and President Donald Trump getting a potential majority on the central bank’s board.
Cryptos Stage A Comeback
Bitcoin made a sharp recovery past $112,000 late evening, recouping some of Monday’s losses. Ethereum also reclaimed $4,600, easing around $4,550 as of this writing.
Bitcoin's market share fell further to 57.5%, while Ethereum's dominance rose to 14.3%, its highest since early November of last year.
About $280 million was liquidated from the cryptocurrency market in the last 24 hours, with nearly equal amounts of longs and shorts wiped out.
However, a tumble to $180,000 could erode more than $620 million in Bitcoin long positions.
Bitcoin's open interest dipped 0.20% over the last 24 hours. Typically, a drop in open interest, coming alongside a price rise, is associated with short covering i.e., when short positions traders close their positions.
Top Gainers (24 Hours)
| Cryptocurrency | Gains +/- | Price (Recorded at 9:20 p.m. ET) |
|---|---|---|
| Cronos (CRO) | +28.24% | $0.1987 |
| Story (IP) | +12.86% | $6.18 |
| Hyperliquid (HYPE) | +12.38% | $48.35 |
The global cryptocurrency market capitalization stood at $3.86 trillion, increasing by 2.64% in the last 24 hours.
Fed Rate Cut Hopes Spike After Cook’s Ouster
Stocks rebounded on Tuesday after Monday's sell-offs. The Dow Jones Industrial Average rose 135.60 points, or 0.30%, to end at 45,418.07. The S&P 500 gained 0.41% at 6,465.94, while the tech-heavy Nasdaq Composite added 0.44% to end the day at 21,544.27.
Investors parsed Trump's removal of Federal Reserve Governor Cook, a move that could potentially hand him a majority on the board.
The odds that the central bank cuts interest rates in the September meeting rose from 83% to 87% over the last 24 hours, according to the CME FedWatch tool.
Downside Risk For Bitcoin?
Widely followed cryptocurrency commentator and trader Ali Martinez noticed a “death cross” on Bitcoin’s weekly Moving Average Convergence Divergence indicator, a pattern historically linked to downside risk.
Death Cross happens when a short-term moving average, typically the 50-day moving average, crosses below a longer-term moving average, typically the 200-day moving average.
Another well-known analyst, going by the pseudonym Wolf, predicted Ethereum's consolidation between $4,000-$5,000 for "nearly a quarter" before the next leg higher.
Photo Courtesy: Travis Wolfe on Shutterstock.com
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