Bitcoin remained relatively flat at $120,000, struggling to break resistance
The cryptocurrency market experienced a broad rally on Tuesday, with altcoins leading the charge while Bitcoin maintained its position near $120,000. The surge came after positive inflation data and comments from Treasury Secretary Scott Bessent suggesting a larger-than-expected interest rate cut.
Bessent told Fox News that the Federal Reserve should consider a 50 basis point rate cut at its upcoming September meeting. “The real thing now to think about is should we get a 50 basis-point rate cut in September,” Bessent said during the interview.
The Treasury Secretary added that the Fed could have cut rates in June if it had been given accurate data, which he described as a “foundational issue” at the central bank. Markets had already priced in a 25 basis point cut, but the suggestion of a more aggressive 50 basis point reduction provided additional fuel for the crypto rally.
While Bessent is not a Federal Reserve member, his comments carry weight as he has been tasked by President Trump with selecting a replacement for Fed Chair Powell. This connection gave his statements extra impact on market sentiment.
Ether was among the top performers, jumping nearly 9% over 24 hours to cross $4,600 for the first time since November 2021. This milestone puts Ethereum’s native token up more than 50% over the past month amid continuing bullish technical signals.
Other altcoins posted strong gains as well. Cardano, Solana, and Litecoin each rose approximately 8% over the past 24 hours. XRP increased by 3.5%, while Fartcoin emerged as one of the day’s strongest performers with a 22% surge.
The total cryptocurrency market capitalization grew by $109 billion in 24 hours, reaching $4.01 trillion. This growth coincided with the release of US Consumer Price Index (CPI) data showing inflation rising at 2.7% year-over-year, below the expected 2.8%.
The lower-than-anticipated inflation figure boosted investor confidence across both crypto and traditional markets. US equity markets rose by more than 1%, while the dollar weakened against all major currencies.
Market analysts note that if the positive sentiment continues, the total crypto market cap could break through current resistance levels and potentially reach $4.05 trillion in the near term. However, if market conditions deteriorate, a fall below the $3.89 trillion support level could erase recent gains.
Despite the broader market rally, Bitcoin showed more modest movement. The world’s largest cryptocurrency traded just above $120,000, changing little over the 24-hour period while altcoins surged ahead.
Bitcoin continues to struggle with the $120,000 resistance level, which has proven to be a persistent barrier. Its next target is $122,000, a level that may be within reach given Bitcoin’s positive correlation with US equities.
Following the recent CPI report, Bitcoin’s performance has mirrored that of the stock market. If equities maintain their strength, Bitcoin could potentially break through resistance toward its $122,000 target.
However, investor selling remains a concern for Bitcoin’s price. If profit-taking intensifies, Bitcoin may experience a pullback. A decline below the $117,261 support could signal a reversal and potentially lead to further losses.
The crypto rally got started early Tuesday morning after the release of the inflation data. In addition to the market movements, there were other developments in the crypto space that contributed to the positive sentiment.
Fonte Capital launched BETF, Central Asia’s first spot Bitcoin ETF on the Astana International Exchange. The fund offers regulated cryptocurrency exposure with BitGo custody and leverages Kazakhstan’s position as a Bitcoin mining hub.
Pantera Capital revealed it has invested $300 million in digital asset treasury companies, including BitMine Immersion and Twenty One Capital. These companies hold major cryptocurrencies like Bitcoin, Ethereum, and Solana, with operations in the US, UK, and Israel.
As the market continues to respond to macroeconomic factors, the divergence between Bitcoin and altcoin performance suggests investors may be rotating into higher-risk assets in anticipation of looser monetary policy from the Federal Reserve.
