The cryptocurrency market is thriving with an increase of nearly 4%, with a market capitalization reaching nearly $4 trillion in the past 24 hours.
Bitcoin is up 4%, surpassing $116,800, increasing 93% compared to the same period last year, creating a ripple effect across the market.
MAIN CONTENT
Fed Chairman Powell suggested lowering interest rates in September, prompting investors to shift to risk assets like cryptocurrencies.
The outflow of capital from the Bitcoin Spot ETF has decreased sharply, indicating the position holding of institutions.
Major altcoins are experiencing strong price increases, signaling the upcoming altcoin season according to in-depth indicators.
How does Powell's suggestion to lower interest rates in September impact the market?
Federal Reserve Chairman Jerome Powell at the Jackson Hole forum hinted at the possibility of the Fed cutting interest rates in September, which increases the appeal of risk assets like cryptocurrencies for investors.
Data from the CME FedWatch tool shows the probability of an interest rate cut rising to 75%. The market reacted quickly, with Bitcoin rising from $111,600 to over $117,000, demonstrating the significant impact of Fed signals on investment flows.
The Fed's change in policy perspective also contributes to improving sentiment, boosting investor participation in higher-yielding assets.
What does the deep outflow from the Bitcoin Spot ETF signal?
The strong decline in outflows from the Bitcoin Spot ETF on August 22 down to only $23.2 million, compared to hundreds of millions in previous days, is a sign that institutions are maintaining their positions rather than withdrawing funds.
Previously, on August 19, 20, and 21, there were recorded outflows of $523.3 million, $315.9 million, and $194.4 million, respectively, putting pressure on the market. The reduction in outflows has reinforced confidence and supported the recovery.
This reflects the accumulation trend of experienced institutional investors, indicating a more optimistic outlook for Bitcoin in the short term.
Ethereum and the impact of current supportive factors
Ethereum also recorded a notable increase to nearly $4,735, thanks to strong support from institutions. For example, SharpLink completed a buyback worth $1.5 billion, while Japan's SBI Bank invested in Circle to develop USDC.
In addition, gas fees on the Ethereum network are at a record low, helping reduce transaction costs and increasing the appeal of DeFi applications, further encouraging participation from individual and institutional users.
How does position liquidation affect the recent price increase?
According to data from CoinGlass, in the past 24 hours, 176,721 traders have been liquidated with a total value of up to $752.96 million. The majority of losses were from short positions, accounting for about $463 million.
Ethereum experienced the largest liquidation of $385.2 million, while Bitcoin recorded $111.76 million in short position liquidations. These forced buy transactions have supported the price increase in the market.
How do altcoins capitalize on the upward momentum?
Alongside the growth of Bitcoin and Ethereum, many key altcoins like XRP, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) have seen significant price increases.
The altcoin season index currently stands at 57, indicating positive signals about the potential for entering a boom phase for the altcoin market in the near future.
Frequently Asked Questions
Why do Fed interest rates affect the cryptocurrency market?
Lowering interest rates reduces borrowing costs, facilitating the flow of capital into riskier assets like cryptocurrencies in search of higher yields.
What is a Bitcoin Spot ETF and why are inflows and outflows important?
Spot ETFs allow investors to access Bitcoin directly through the stock market. The inflow and outflow of capital reflect the holding or withdrawal sentiment of institutions, affecting market supply and demand.
What does low gas fees mean for Ethereum?
Low gas fees help reduce transaction costs and operate DeFi applications, stimulating users and developers to increase their usage of the Ethereum network.
Why does liquidating a short position create upward price pressure?
Liquidating a short position forces investors to buy back assets to close their positions, quickly driving prices up in a short time.
What does the altcoin season index indicate?
This index reflects the strength and price momentum of altcoins compared to Bitcoin, with high levels indicating that altcoins are becoming more attractive in the market.
Source: https://tintucbitcoin.com/vi-sao-crypto-tang-gia-hom-nay/
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