Leading cryptocurrencies rallied alongside stocks on Thursday as investors raised risk appetite in anticipation of interest rate cuts.
‘Greed’ Sentiment Returns
Bitcoin climbed above $116,000 for the first time in nearly three weeks. Spot ETF inflows surpassed $757 million on Thursday, the largest since mid-July, according to data from SoSo Value.
Ethereum sailed past $4,500 overnight, the highest in two weeks. XRP also rose by nearly 2% in the 24-hour period.
Bitcoin's dominance fell to 57.4%, while Ethereum's market share was largely unchanged at 13.6%.
Over $345 million was liquidated from the cryptocurrency market in the last 24 hours, with $231 million in short positions erased. Meanwhile, more than $262 million in Bitcoin shorts risked liquidation if the apex cryptocurrency rises to $118,000.
Bitcoin’s open interest climbed 3.12% in the last 24 hours. Interestingly, Binance derivatives traders were betting against the price rise, according to the Long/Short Ratio.
The market sentiment flipped from "Neutral" to "Greed," according to the Crypto Fear & Greed Index.
Top Gainers (24 Hours)
The global cryptocurrency market capitalization stood at $3.95 trillion, growing by 2.34% in the last 24 hours.
Weak Jobs Data, Hotter-Than-Expected Inflation
Stocks marched to new record highs on Thursday. The Dow Jones Industrial Average spiked 617.08 points, or 1.36%, to end at 46,108.00. The S&P 500 rose 0.85% to finish at 6,587.47, while the tech-focused Nasdaq Composite closed up 0.72% at 22,043.07.
The Consumer Price Index rose 0.4% in August, higher than the 0.3% estimated by analysts. Meanwhile, the core CPI increased 0.3%, in line with the estimates.
On the other hand, the labor market showed signs of a slowdown, with initial jobless claims for the week ending Sept. 6 coming in at 263,000, up from the 240,000 estimate.
Traders are pricing in a 92.7% chance that the Federal Reserve slashes interest rates by 25 basis points next week, up from 91% a day earlier, according to the CME FedWatch tool.
Has The ‘Alt-Season’ Begun?
Widely followed cryptocurrency analyst and trader Michaël van de Poppe said that a potential 20-30% dip in Ethereum price during the uptrend could be a buying opportunity.
"I’m more than happy to be buying it," the analyst said. "ETH isn’t going to peak at $4,800, it’s literally only starting, wouldn’t be surprised if this is going north of $10,000."
Another well-known analyst, Daan Crypto Trades, said that "alt season" has already begun, citing a chart that showed how 78% of the top 50 altcoins have outperformed Bitcoin over the past three months.
"With BTC pretty much flat in the past few months and ETH up nearly 2x that’s not so hard to believe. 78% of alts in the top 50 has outperformed BTC in the past 3 months. That’s quite substantial," the analyst stated.
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