Bitcoin continued to climb after US President Donald Trump stated he had no intention of firing Federal Reserve Chair Jerome Powell, alleviating concerns over the central bank’s autonomy.
The largest cryptocurrency rose about 3% before trimming some gains to exchange hands at $93,804 at 7:28 a.m. in London on Wednesday. Smaller tokens including Ether, XRP, and Solana also rose.
Bitcoin topped $90,000 on April 22, signaling it was breaking away from its longstanding tendency to move in the same direction as US stocks. However, the token's value then increased alongside stocks and the dollar following Trump’s comments on Powell and amid optimism about potentially easing trade tensions. Treasury Secretary Scott Bessent noted at a closed-door investor summit that the tariff standoff with China is unsustainable and that the world’s two largest economies will need to find ways to de-escalate.
US-listed Bitcoin exchange-traded funds saw a combined $936 million in inflows on Tuesday, marking the third-highest inflow for the group this year.
Another boost for the cryptocurrency market came from reports that Cantor Fitzgerald LP, Tether Holdings Ltd., and SoftBank Group are in talks to create a $3 billion vehicle intended to absorb billions of dollars in cryptocurrency.
Nevertheless, the crypto rally might face a correction by the end of the week, according to Stefan von Haenisch, director of over-the-counter trading in the Asia Pacific for crypto custody firm Bitgo Inc. The market “has rallied relentlessly and feels a bit overbought here,” he commented, suggesting that a correction to at least $88,000 for Bitcoin “would not be unexpected.”
QR Capital, a Brazil-based crypto asset manager, observed a “sharp decline in spot trading volume on centralized exchanges, with a shift of liquidity towards the futures market.” This indicates that investors are “seeking leverage for more aggressive positions in crypto,” albeit at the risk of sharp corrective moves, as an excess of leveraged positions could lead to cascading liquidations if there is a sudden change in market sentiment.
This article has been published in bloomberg.com via Yahoo News.
