Altcoins like XRP, Solana, Cardano, and Dogecoin rode Bitcoin’s momentum with impressive gains.
The cryptocurrency market is showing signs of life again, with a nearly 4% jump, as its market cap hit almost $4 trillion in the past 24 hours. Meanwhile, with Bitcoin up almost 4% from yesterday, crossing the $116,800 mark, a remarkable 93% increase from one year ago.
This rally has surprised the entire crypto market while traders are wondering the reason behind this massive jump.
Let’s break down what’s driving this rally.
Federal Reserve Chair Jerome Powell’s recent speech from Jackson Hole strongly hinted at upcoming interest rate cuts, encouraging investors to move into risk-on assets like cryptocurrencies. Meanwhile, the CME FedWatch tool now shows a 75% chance of a cut
Powell’s softer stance pushed investors toward riskier assets like crypto. Bitcoin quickly bounced from $111,600 to above $117,000, showing how strongly markets react to Fed signals.
Another big reason was the sharp drop in Spot Bitcoin ETF outflows. After billions left earlier in the week, starting with $523.3 million on August 19, $315.9 million on August 20, and $194.4 million the other day, the outflow sharply dropped to just $23.2 million on August 22.
This shows institutions are holding their positions instead of cashing out, giving markets a fresh boost of confidence.
Ethereum also saw a big push, climbing to near a new high $4,735. A big reason behind this move is strong support from institutions. SharpLink announced a $1.5B buyback, and Japan’s SBI bank invested in Circle to grow USDC.
At the same time, gas fees on Ethereum are now at record lows, making it cheaper for people to use DeFi.
According to CoinGlass data, the past 24 hours saw 176,721 traders liquidated, with total liquidations reaching $752.96 million. Short sellers were hit hardest, with nearly $463 million in short positions wiped out.
Ethereum accounted for more than half the overall liquidations ($385.2 million), while Bitcoin recorded $111.76 million in short liquidations. This forced buying helped push crypto prices higher, adding to today’s rally.
The market rally today isn’t limited to Bitcoin and Ethereum alone, major altcoins like XRP, Solana (SOL), Cardano (ADA), and Dogecoin (DOGE) have also posted substantial gains.
On top of this, the Altcoin season index has seen a jump and is currently standing at 57, indicating the altcoin season is near.
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